At TSP, we use the following five property management strategies to deliver high returns to our clients and add long-term value across our portfolio:
- Active management = Constant improvement
- Customer is king
- Adopt a sustainability bias
- Do the little things
Strategy 1: Active management = Constant improvement
Does your building have an Annual Asset Plan? If not, it is effectively standing still and hindering its value growth. The key to unlocking exceptional real estate returns is active management – driving constant improvement.
By implementing an Annual Asset Plan and Management Framework, you can ensure that your building consistently improves every year.
The plan should encompass broad objectives such as “achieve 100% occupancy” or “improve sustainability in line with government mandates” – broken down into specific KPIs that serve as a roadmap towards achieving those goals.
This approach drives improvement, minimises vacancies, and maximises cash flow from day one.
Strategy 2: Hotelisation
Hotelisation is the hottest trend in commercial real estate. It requires a fundamentally different approach to management. But what does hotelisation mean?
Think: fusion of hotel lounge, restaurant, residential interiors. It is the growing popularity of transforming traditional offices into dynamic, flexible environments that rival luxurious hotels.
The focus is on adding a premium service level. Because today’s tenants will pay more for quality space which provides a sense of pride, exclusivity, and members’ club feel. This premium is achieved through creating a consistent, standardised experience with an added taste of luxury.
Workspace must be intentionally designed and meticulously managed to provide a best-in-class experience. This could be through a stylish reception with a friendly concierge, an in-house coffee shop or rooftop bar, a podcast studio or members’ lounge.
In short, we are now in the hospitality business. And in the long term, ‘hospitality will eat the office’ as people crave more experience.
Hotelisation presents a compelling opportunity for office investors. It should be at the core of your asset strategy.
Strategy 3: Customer is king
Tenants are the new customers: you must cater to their needs.
To ensure you are easily contactable and responsive to customer requests, strong communication channels are vital. A Welcome Pack outlining key people and contact details is an essential first step. Monthly newsletters providing relevant building and community updates foster positive relationships.
Additionally, using WhatsApp Business to provide a concierge service is increasingly popular with today’s customers. Instant messaging and automatic responses saves time for the management team, efficiently triaging and handling requests.
Effective community management is important for creating a welcoming and fun environment. Organising quarterly events in communal spaces – pastry mornings, lunch-time pizza, historical guided walks, or even an ice cream van – builds a lively community. Get creative!
These efforts lead to increased customer satisfaction and long-term loyalty.
Strategy 4: Adopt a sustainability bias
Demand for assets with high sustainability credentials is outpacing supply. This means there is enormous opportunity in the new sustainable economy.
Heightened demand is evident in the 11.6% rental premium for assets rated BREEAM Excellent and 12.3% rental premium for BREEAM Outstanding assets (Knight Frank, 2021).
For capital values, there is 20.6% premium for BREEAM Excellent buildings and a 3.7% premium per single step EPC improvement (JLL, 2023).
Pressure is compounded by regulation. Between 2009-2019 the number of EPC B commercial assets grew by 8% – this rate needs to increase to 85% to align with government policy.
To maximise returns, a deep understanding of sustainable principles is essential and adopting a sustainability bias for every management decision is crucial. Improving your EPC rating, implementing sustainable waste management, procuring renewable energy – all contribute to long-term efficiency, cost savings and increased asset value.
Sustainability is the decision vector for success in today’s market.
Strategy 5: Do the little things
How you do one thing is how you do everything.
As customer expectations and standards rise, attention to detail really does matter. Greet new occupants with personalised welcome gifts, such as a hamper of locally sourced goodies with a handwritten card welcoming them to their new office.
Embrace the power of branding with meticulously designed signage and lapel pin badges for building staff to exude sophistication. Ensure you have a consistent material palette throughout, creating an elegant and cohesive aesthetic.
Elevate occupiers’ experience with thoughtful touches like a daily towel service, GHD straighters in the vanity area, luxurious soaps and shampoos, biophilia, and even a bespoke building fragrance.
By paying close attention to these finer details, you’ll create an exceptional experience that leaves a long-lasting positive impression.
So that customers will choose to use their office day after day.
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