A lifeline for occupiers
This article was originally published in Financial Mail.
SA’s commercial property sector is mature, with a number of sophisticated listed companies operating in the leasing space. However, until now, tenants and buyers of commercial property have largely had to fend for themselves in negotiating suitable premises at favourable terms. The launch of the Cresa brand in SA intends to change that.
Officially launching on September 25, Cresa SA will form part of a global commercial real estate services company with an integrated approach to partnerships with occupiers — and occupiers only. There is no ambiguity about who Cresa represents.
“Cresa partners with occupiers to advise on real estate strategy, whether it is leasing as a tenant or purchasing by way of portfolio construction as an owner. This is why the term occupier is more appropriate than tenant,” says Cresa’s head of corporate real estate, Guy Voller.
He says Cresa’s methodology across more than 80 offices worldwide is to sweat the small details and think beyond mere space. “We consult and advise on location and site strategy, building technology solutions, portfolio construction, transaction management, workspace design and workplace intelligence. This integrated approach is designed to bring the greatest value to occupiers.”
According to Voller, the institutional knowledge and systems at Cresa, which retains more than 2,000 clients globally, is what will be the differentiator in SA.
“The value is in having a global partner because we have access to processes and systems that are not available here. It’s a direct narrative: this broad range of expertise is intended to get the best value for occupiers, whether it is in lease negotiations or in refurbishing their properties to achieve energy and green targets or other cost savings,” Voller says. Real estate is more strategically integral to the operations of businesses in certain sectors, such as manufacturing or telecommunications service providers, who have specific needs. But, says Voller, unlocking value and even liquidity for clients through disposing of underutilised assets can make a big difference to any company’s bottom line.
“Every client, whatever their line of business, is looking for ways to leverage their real estate to maximum advantage to achieve savings and efficiencies. If their core business is not real estate, that is where our intimate understanding of the market and analysis of their particular business needs come in,” Voller says.
In the most common arrangement in developed markets, landlords and tenants are represented by specialist parties to strike the best contract terms. In SA, however, tenants are at a disadvantage—an imbalance Cresa aims to rectify.
“Our goal is, at worst, to strike a deal that is on par with current market trends. At best, we can renegotiate an existing lease that has become prejudicial to the tenant business given the economic back-drop and give companies a new lease on life while potentially providing landlords with lease extensions that benefit both parties,” Voller says.
While most property rental or purchase decisions tend to be driven by financial factors, Voller says Cresa also advises on other factors that are often not even considered by executive teams. “Usually a business would have to call on several different teams of consultants to assess their logistics and supply requirements, staff needs, traffic, unexpected costs and infrastructure connectivity, but with Cresa’s integrated systems we can assist clients in detailed scenario planning, mapping and decision-making.
“Every recommendation we make ties together all these fields of information so that there is a concrete business case. This will be a game-changer for SA clients. The value proposition lies in acting as advocates for client occupiers and only occupiers.”
Voller points to the right-sizing of many banks and retailers in a tough economy as a perfect opportunity. “It's not just about rental terms. It’s about using assets efficiently. Businesses are seldom in a static position—they're either growing or shrinking. And, especially when they’re shrinking, needs change, and poor utilisation of real estate can be debilitating where asset values are out of touch with where the market really is right now.”
Cresa SA’s goals are to represent both multinationals that already deal with Cresa in other territories, as well as local corporates looking to improve their real estate strategies. Voller has laid the groundwork for expanding the Cresa brand into the rest of Africa.
“I’m excited to see how clients will resonate with the brand. They're growing rapidly and securing client instructions because they are disrupters of the traditional real estate model. Clients want to know they're looked after, and that’s the journey we will be walking with SA businesses,” Voller says.