Commercial Property Occupancy Costs

Commercial Property Occupancy Costs

Property Insights

2014-10-08

It's rare that commercial property occupants concern themselves with property operational costs after they've signed a lease or finalised the purchase of their premises. Instead, occupants usually focus on increasing revenues and reducing cost lines within the organisation. Overlooking occupancy costs can have a significant impact on your business, which can ultimately cause problematic inefficiencies within your work environment. Generally speaking, property or facilities management is an administrative function performed by line managers or outsourced to sometimes-ineffective property managers. Controlling occupancy costs for a single location or portfolio of properties starts with establishing the cost drivers and managing the intrinsic interplay between them. Location drives costs for staff and rentals, and in the current economic cycle more opportunities exist with increasing vacancy rates. Retaining or attracting quality tenants is vitally important to a landlord. We're witnessing a trend where deals are being concluded most often by landlords who offer well-structured, attractive terms and effectively negotiated concession packages. Also bear in mind that the efficiency of your working spaces is a major contributor to occupancy costs. Opportunities exist for commercial property users to achieve cost savings that enhance their bottom line performance. Speak to a qualified property practitioner in order to successfully achieve efficiency and performance objectives. The impact of rising occupancy costs on revenues and performance can be significant and by reducing these costs a business can increase profitability. After all, every Rand saved ultimately affects a business’s bottom line. Proactively managing occupancy costs can be challenging where decisions are fragmented by organisational structures. For advice or market related occupancy costs information contact a qualified property practitioner for assistance.

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