High vacancy levels in the commercial lease market are starting to see landlords make some real efforts to woo tenants.

I’ve started to see landlords undertaking refurbishments to make their buildings more attractive to tenants. There is also a trend to not simply take on cosmetic improvements, but to improve the buildings facilities too.

For instance I know of one case where a landlord has had the lifts in a building overhauled to run more efficiently and use less energy. Likewise, air conditioning systems in buildings are being upgraded to use less power and water as well as do a better job of cooling buildings.

It’s interesting to observe this trend and, if you like, the triple-win this type of refurbishment offers. Once the landlord has dealt with the cost of the capital improvement, there is a win for them in reduced costs for running the building, and therefore less overheads to pass on to tenants. There is a win for the tenant in reduced operating costs. And there is an overall win for the environment as there is less pressure on resources such as power, water and fuel.

As a rule of thumb, the energy efficiency measures can save about five percent of the overhead costs on a building.

Energy efficiency measures are well worth taking into account when assessing the costs of up-front rental and the ongoing costs for utilities during a lease.

Smart landlords are now starting to see that these efficiencies are an attractive selling point for tenants looking ever more closely at the bottom line.

At Parallel Directions, we have developed specific processes for analysing these opportunities, as it is important to factor them in alongside all other considerations when evaluating the viability of a premises lease.

So, my advice is to look closely at how landlords are starting to woo tenants, including offers with reduced overheads that are more than simply skin deep.

Tags: commercial property leasing, energy efficiency, Sustainable Green Building

This entry was posted on Tuesday 21st July 2009 and is filed under Sustainability. Both comments and pings are currently closed.