AU Tenants taking the chance to bargain
Property Here - Friday, April 19, 2013
TENANTS in the commercial property market - rather than landlords - now well and truly have the upper hand, new market research has confirmed.
And they are driving hard bargains at the negotiating table as prevailing economic conditions force them to look at their bottom lines and landlords become increasingly eager to retain them as tenants.
"The current economic conditions have created a tenants' market,'' Colliers International's, national director tenant representation, Simon Crouch, said.
"So now is the time for tenants to examine every space their organisation occupies and explore the strategies available to reduce risk, maximise operating efficiency and drive down costs.
"In this type of market landlords are keen to retain or secure tenants on long-term leases to guarantee income and extend their Weighted Average Lease Expiry.
"So there are opportunities, for instance, for tenants to renegotiate or restructure their lease and receive a significant cash incentive from their landlord for extending.''
Mr Crouch said there were numerous examples recently where 100 per cent of a tenant's new fitout was covered by well negotiated incentives.
"In addition, there is often additional incentives left over from the fitout to be contributed towards rent reductions or rent free periods,'' he said.
"Many tenants whose fitout, building and location meets their needs may elect to allocate the entire incentive towards rent to drive down operational costs.''
Incentives in the Sydney CBD range from 22-30 per cent and the Brisbane CBD is not far behind.
Read more: http://www.news.com.au/realestate/renting/tenants-taking-the-chance-to-bargain/story-fndbatbk-1226624225099#ixzz2QsRkFjod