Finding tenants for your commercial property
If you’re a commercial landlord, you’re going to need tenants. Luckily for you, tenants also need you. In the first half of 2022, 93 new businesses were created every hour, with 402,000 being registered in the same period.
Tenants with a strong covenant, influenced by financial track record, revenue stability, and good credit, will increase the value of your property. Investing into your building, by including sustainable features, high-quality design and a range of amenities is crucial for attracting high-covenant tenants, in turn increasing your revenue.
Having tenants also increases the visibility of the property to other tenants, showcasing it in action, helping to raise the demand for your property and reduce vacancy periods.
Here at Interaction, we can help you create a more attractive proposition for your building so you can attract the perfect tenants.
Identifying the best commercial tenants
The best commercial tenants are those who have a strong covenant. The below factors influence this:
A tenant with a strong brand identity and reputation can bring a level of prestige to the property, making it more attractive to investors, future tenants, and potential buyers. It also helps to have well-known tenant brands in the property as it can attract new customers, drive more sales and generate more income for the landlord.
Creditworthiness and Reliability
This is an indicator that a tenant is less likely to cause any disruptions to the property, such as damage or not respecting the licensing agreement. In the long run, this can reduce a landlord’s risk and ensure a steady income stream, especially because a reliable tenant is likely to renew their lease.
Regular and Consistent Revenue
A tenant that generates consistent revenue is more likely to be able to make regular rent payments, positively impacting the property’s overall value and marketability and creating an attractive sense of excitement around the property. With this consistency, the landlord can plan and budget accordingly, and make decisions about the property with more certainty.
How to attract commercial tenants
Consider sponsored posts and targeted advertising on social media
If you are looking to increase the visibility of a property and reach a wider audience, sponsored and targeted posts are the ideal solution. By targeting specific demographics and geographic areas, you can optimise this investment to ensure you attract the perfect tenant.
You can generate a buzz around the property before it is even available to rent with sponsored content, creating a sense of competition and offering incentives such as reduced rent for signing a long-term lease.
Advertise in trade publications
Trade publications are industry specific magazines, newspapers or websites which have a specific audience. By advertising your property in these publications, you can reach tenants who are actively looking for a new commercial space. If you’re targeting growing businesses, publications such Business Leader, Business Insider, and Real Business are great places to start. You may even further segment your target market and focus on sector-specific publications, for instance media aimed at fast-growth tech companies or financial service businesses.
Highlighting the benefits of the property and its location means you can generate interest and attract potential occupiers to arrange a viewing.
Offer a digital tenant experience platform
A digital tenant experience platform can be a website or mobile app that provides information about the property and its features, such as floor plans, photos, and virtual tours. It can also provide information about the surrounding area, such as transportation options and nearby amenities. These platforms can also provide a way for tenants to interact with other tenants in the building, as well as with the landlord.
This virtual experience can attract commercial tenants as a convenient and user-friendly way for them to interact with the property, establishing the all-important things, like where they might keep the biscuit tin, and how many houseplants they’ll have space for…
Make sure lease conditions aren’t too restrictive
Businesses that are just starting out or who are unsure of their long-term plans may find a flexible lease attractive since it allows them to test out an area without making a daunting commitment.
Also, flexible lease terms are beneficial to tenants who are looking to expand or relocate, since they can add more space or renegotiate the lease as their needs change. Overall, they can help the tenant to manage risk and uncertainty, and it can also help the landlord to retain tenants longer.
Plug and play fit-outs are ideal for tenants looking for flexible leasing options. Our Primed team can equip your space for immediate occupation, ready to be let to a range of prospective tenants.
Contact a professional broker
Brokers can provide a landlord with valuable insights into current market trends, rental rates and the types of businesses who are actively looking for a new space. They can also look into creditworthiness and projected revenue to identify high-covenant tenants.
In addition, creative marketing campaigns can be created with the help of a broker, including materials such as brochures, floor plans, and virtual tours. Brokers can then use their professional networks and industry connections to promote the property with these materials.
Additionally, professional brokers can assist landlords in negotiating and drafting lease agreements, and they can also help to manage the move-in process and to ensure that the tenant is set up for success in their new space.
How your office space can attract your ideal commercial tenants
Remember: the space should speak for itself. Here are some simple tips to optimise the property and maximise interest from tenants.
Invest in a high quality office fit-out
High-quality offices are sought after now more than ever before, with grade A office fit-out take-up accounting for 47% of 2022 Q1 take-up in Bristol. Investing in high-quality finishes, flooring and lighting will help to attract the ideal tenants. Also, it may encourage the tenants to take more care of the property, keeping it clean and damage-free to retain its quality. This will reduce maintenance costs and minimise risk for the landlord.
Tailor the floor plate to your proposition
Depending on the area the building is in, your tenant profile may look slightly different. It’s important to tailor the floor plate to suit the working styles of the tenants you want to attract. Some firms will want a variety of enclosed working zones and high-productivity spaces whilst others will want more open space, amenities and communal areas. Consider combining smaller units or adding mezzanine levels to increase the floor plate for businesses that are growing, have a large number of employees, or need more from their equipment. This can also generate more revenue.
Many business set ESG goals to improve their overall sustainability performance and ensure at a minimum they meet the government target of net zero by 2050. In combination with new legislation around increased EPC ratings, a sustainable building is potentially the most influencing factor in attracting commercial tenants.
Energy efficient lighting and HVAC systems can reduce energy costs and decrease the environmental footprint of the property. Go the extra mile with sustainable materials such as solar panels and green roofs, which are not only visually pleasing but also show your commitment as a landlord to a sustainable future.
If you will be fitting out the building to a CAT A finish, consider what is truly necessary. Many CAT A fit-outs no longer include flooring or M&E since tenants often move in and remove them immediately, opting for something to suit their preferences, or to allow CAT B works to go ahead. To avoid waste and reduce the environmental impact of the building, many landlords provide a fund to go towards flooring which the tenant can source themselves.
Incorporate biophilic design
Biophilic design has a positive impact on wellbeing, hence why it should be a no-brainer for landlords. Maximising natural light and incorporating greenery, natural materials and outdoor spaces are just some of the ways you can improve your biophilic design. This refines air quality, improves circadian rhythms, creates a sense of warmth and connection to nature, and promotes tranquility.
Include non-rentable space
Amenities such as lobbies, receptions, active travel facilities, coffee shops and a gym are great ways to attract high-covenant tenants. Whilst spending your budget on these might seem counterintuitive, they can provide a great return on investment. Communal areas such as coffee bars foster communities amongst businesses, and active travel and exercise facilities promote workplace wellbeing and productivity, which many employers are continuously striving to improve.
Perhaps there is a gym across the road from your building. To give back to the local community and use your space wisely it is worthwhile to enter into partnerships with these local facilities, whereby your tenants may get discounted or free gym access as part of the package.
Over the last few years, the concept of the 15-minute city has gained traction in property development. The concept is centred around the idea that ‘everyone living in a city should have access to essential urban services within a 15-minute walk or cycle ride’. By considering people’s lifestyles and needs outside of work and including amenities in your building, you are improving their access to essential services.
The perfect tenant will vary depending on property type, size, location and landlord, but with these tips under your belt, we’re confident you’ll find yours. It’s helpful to establish which sort of tenant is best for your property before you put measures in place to showcase your space. Pick up the phone and call us on 01225 485600 for more advice. After all, we have been experts in commercial office design for over thirty years.
Looking for more insights?
If you found this useful, download our report on Attracting Tenants: What Commercial Landlords Need to Know, or check out our Guide to Commercial Property Value in 2023. We cover everything you need to know so you can stay ahead of the market.