Creating a great working relationship with a major tenant does pay dividends and this is a good example of how that investment in time, communication and care really can pay off.
An uncertain future. An unhappy tenant…
A large retail warehouse in Austrasse, Speyer, was facing an uncertain future. Its tenant – a major children’s retailer – was dissatisfied and the lease was in its last few years before expiry.
Talking it over
When FI Europe was appointed to manage the property, it was valued at €850,000. But the dissatisfied tenant was likely to leave when the lease expired.
When we engaged with the tenant they complained that they had had no communication from the previous agents or relationship with them and that the rental on the property was too high. Also, we discovered some minor works that needed carrying out under the tenant’s lease agreement which were outstanding.
Our conclusion was that the tenant was right about the high rent and looking at the outstanding works we decided to carry these out ourselves at a cost of €5,000. We discussed all this with our tenant and then negotiated a five year lease extension at the existing rental without any rise and provided a month’s rent free incentive. They were very satisfied with the outcome.
A certain future with a happy tenant
Business is all about relationships. Our relationship with this tenant achieved mutual benefits and secured the future of this property.
As a result, its value has risen from €850,000 to €1.3 million which is a great result.