How does our new normal impact the role of Landlords?
Traditionally, commercial landlords have been focused on managing assets, rather than people, and it is this focus that poses a potential health, and therefore business threat today.
This is not necessarily a new problem, however as with so many business issues, the pandemic has accelerated many of the pivotal responses we have been witness to for years. This urgency has created a pressure on landlords to be proactive rather than be left behind.
As is the pattern with disruption across industries, what we are seeing is a redistribution of power: away from being exclusively held by Landlords, and towards a commercial obligation to flexibly incorporate tenants’ needs.
These priorities can include:
- Flexible working practices
- HUBs rather than large open plan office spaces
- Service-based arrangements that can be altered to suit business and public health concerns
- Not only looking at the SMARTS of buildings from an operational perspective, but also from a HUMAN perspective
- Shorter term leases and smaller amounts of space
All of these elements can impact the bottom line for a commercial landlord, with funding requirements and WALE (weighted average lease expiry) valuations dependent on secure long-term leases.
We see these tenant requirements as a business wake-up call. Success in a commercial property enterprise is no longer about who owns the asset, rather it is about what service can be offered in the building. Landlords need to be available to service 80-100 tenants in a building, rather than 8-10 major tenants. This requires a completely new set of skills in client relations and building an overarching community ethos.
The team at Work Club has prided itself in flexing to our changing clients’ needs, and 2020 represents an escalation of our focus on this. In order to serve our community as effectively as possibly, however, we know we need to listen to individual clients as well as analyse the broader needs of the community we house.
What are your current business needs and shifting priorities?