Warehouse tenants expect more from landlords

Warehouse tenants expect more from landlords
A recent Occupier Satisfaction Survey commissioned by the Property Industry Alliance and carried out by the Investment Property Databank and researcher Kingsley Lipsey Morgan*, concluded that many landlords are failing to respond to market needs and expectations. Andy Melvin from warehousing property specialist sbh looks at some of the report’s conclusions.

“While the 154 occupiers interviewed rated their landlord’s performance as average, the results highlighted areas of both satisfaction and deep concern. The quality and choice of buildings available came out with the highest rating, with two thirds saying they were able to find property of the right size and location, and some 80% expressed satisfaction with building specifications and build quality.

However only one in five considered they were being offered good value for money, and the chairman of the report’s steering group pointed out the contrast with overseas markets that generally offer more flexible leases and greater attention to the landlord-tenant relationship. Less than one in five tenants felt that landlords had a good understanding of their needs and half did not feel they were regarded as a valued customer of the industrial property industry.

sbh’s experience of representing the interests of warehouse tenants for more than two decades bears out the survey’s conclusions. While some landlords and developers listen to the market and play an active role in developing partnerships, too many fail to recognise that some occupiers may vote with their feet and relocate elsewhere in Europe where costs and conditions are more favourable.

Designing and specifying a modern warehouse requires a deep understanding of the logistics process and the levels of technology that are appropriate. So it’s not surprising that few landlords or developers either have the desire or expertise to offer the kind of guidance and advice that most warehouse tenants need and expect.

As sbh’s prime role is in representing the best interests of the would-be tenant, the most valuable contribution that we can offer is an in-depth knowledge of both property in general and warehouse design in particular. Issues as diverse as energy management, racking and floor specification, fire protection systems, rental and contractual terms, and how to cope with expansion, all contribute to the success or otherwise of a project. For clients such as Nissan, L’Oréal, Austin Reed, Kellogg and others, sbh has often been able to bring the two sides closer, helping the tenant to achieve the right warehouse package, and the landlord to sign up a profitable agreement with a satisfied client.”

* See Property Direct, 25th May 2007

June - 2007