Retention case study
2009/10 Key priority: Maintain high occupancy
Retention case study
“With over 140 leasing transactions during the year, our focus on our tenants has really paid off.”
Peter Keel
Asset Manager
Recessions hit tenant demand. Maintaining high occupancy in this market is a key challenge.
To minimise the impact from the difficult leasing conditions as the downturn took hold, in late 2007, we identified two operational priorities:
- work hard to retain tenants wherever possible; and
- seek to reduce voids through minimising development activity and maintaining a pragmatic leasing policy.
Since then, our retention rate has steadily improved and, for the year to 31 March 2010, it stood at 71%, significantly higher than in previous years.
Good, constructive relationships with our tenants are crucial to this success and by continuous engagement with them, we aim to identify their changing needs, helping to find them the right solution.
In the year to 31 March 2010:
- 428,000 sq ft of space was subject to a lease expiry or break (A)
- we retained 71% of tenants by area (B)
- and subsequently let or had under offer a further 16% (C)
- 6% is under refurbishment (D)
- leaving us with 7% of this space still to let (E)
As market rents grow, development provides a good opportunity to grow with it. As markets turn down minimising development exposure is key. That’s why we entered the recession with one of the lowest void rates of any UK property company.
Our pragmatic leasing policy has also paid off, enabling us to reduce void levels in the investment portfolio to only 3.4% at 31 March 2010.
