How Building Owners Win Tenants In An Over Supplied Market

The typical solution that building owners undertake to make their commercial space more attractive to tenants is a fitout. A fresh new look and functionality that is appropriate to the dimensions of the space can be created by commercial fitouts in Canberra that has a team of skilled and experienced designers.

In a Christchurch office building, the owner invested nearly $200,000 for a fitout to win tenants in the over-supplied market. According to Gary Sellars, a valuer in Christchurch, there is an oversupply of office, retail and hospitality space in the centre of the city and the best incentive to tenants is to improve the space through a commercial fitout.

In his annual presentation to the member of the Property Council and Christchurch’s real estate industry, Sellars showed examples of real situations where a building owner contributed $200,000 for a fitout to be able to secure a 10-year lease. Another building owner contributed $130,000 for the same reason. The amounts varied because it was based on the size of the office space and how desperate the landlord happens to be.

Sellars was unsure if a building owner contributed more than $200,000 for a fitout. However, it is possible if the lease covers several floors. Generally, the cost of a fitout and the period where the rent is free has resulted to a drop of about $50 per square meter in rent. For example, in the central city, rent for top grade office has dropped to $350 to $370 but after the incentives the rents were more like $280 to $320. There were no signs of incentives disappearing any time soon.

Based on Sellars’ presentation, in the central city, vacancy rate was 20%. Some hospitality businesses are struggling but they are hopeful that the summer will be better. They do not have any immediate need for development.

Right look is always important and it can be provided by commercial fitouts in Canberra that will maximize the space while retaining its visual aesthetics. The commercial space will be given the right look and feel through proper organization of furniture, equipment and décor. Customers will certainly enjoy the design that was made purposely for their needs.