Two principles of successful commercial property investment

GUEST OBSERVATION

Behind the buildings that are our business in the commercial and industrial property sector, is the real value: our people.

No matter how much hard work goes into planning, design and construction, a building remains a liability without people; that is, the tenants.

I think our sector can lose sight of the reality that it’s the people who use a building that release the entrapped value in the building.

And while they may be our “tenants” or our “customers”, the reality is that they’re people first, and we all know people value relationships that go beyond the transaction.

We believe the old business saying that the ‘customer you have is the one you want to hold onto’ is a cornerstone for success.

It’s more difficult and costly to get new customers than to retain existing ones.

Our strategy is to retain existing customers – our “tenants”.

We systematically travel the country to meet tenants face-to-face, respecting both their time and their businesses.

The core of our business is maintaining relationships and keeping tenants happy - and keeping them in our buildings.

We ensure our tenants can focus on running their businesses rather than stepping outside their expertise. We deal with the complex property processes for them, because that’s our area of expertise.

And no matter where they are on the leasing cycle – 10 years out or just months to expire – we value and deliver the same standard of service.

Putting relationships first builds trust and that means we can move quickly, act decisively and confidently. Our confidence gives others confidence and in turn drives their success.

To explain, less than 12 months ago Quintessential Equity acquired a five level commercial building with a net lettable area of 7,129 square metres at 166 Epping Road, Lane Cove West in Sydney.

The building was 20% unoccupied and had been for some time. Our immediate priority was to attract new tenants, but to do this we had to make significant enhancements. 

Within the first month our engineers had assessed the building’s condition and discussed enhancements with existing tenants, based on their needs.

A year after settling on the property in April 2013, occupancy is now 97.75%.

If you don’t have tenants, your building can quickly become a liability and your asset can enter financial distress. 

The core of our business is maintaining relationships and keeping tenants happy - and keeping them in our buildings.

This is a very simple philosophy, but it pays dividends to us.

And it will be how we continue to run our business regardless of the ups and downs, because it is what we believe.

Shane Quinn is director of Quintessential Equity.