Behaviour is closely linked with belief. If your tenants believe that they hold all the cards, you can expect them to behave accordingly. The recent adjustment in the property market has placed landlords in a relatively weak position. Right now, the tenants have the advantage, but this bias will only continue until landlords adapt by reviewing their approach and changing their operating practices. Then we will start to see a restoration of balance in the property market.

Today, businesses face an uncertain future, and this uncertainty creates inertia. With upcoming lease reviews, tenants procrastinate; they are safe in the knowledge that no one is snapping at their heels for the property. This of course is a short term phenomenon, but without a recovery in sight it dominates the business agenda for the foreseeable future.

So what can the landlord do to regain a position of influence? On the face of it, landlords have been in a product based business. While there is sufficient demand for the product (the property), rents and leases can be negotiated from a position of strength. But we all know what has happened to demand over the past eighteen months.

It’s time for landlords to view property as a service based business, and that means concentrating on the customer. Tenants have problems, needs and aspirations. Understanding these is the first step in an approach that positions your property in terms of their requirements. Putting tenants at the centre of your strategy means that you are starting to treat them as customers in the true sense of the word.

Some creativity and foresight may tempt a tenant to accept a deal that accommodates a degree of forward pricing, building in some projected deflation. It may go against the grain, but a flexible approach to your tenant can help to satisfy their specific needs; such as subletting to trim costs or less restrictive surrender clauses to reduce risk. This again can provide impetus to the negotiating process.

Above all, it’s about building a relationship with your tenant to understand their needs. A resentful tenant will be tempted to walk, leaving you with the challenge of attracting a suitable replacement, but a satisfied customer will be inclined to stay put, restoring stability to an otherwise uncertain portfolio valuation.

Read the full story to find out more.

Or if you are looking to build value in your property portfolio call me, Rory Newsome, Divisional Director - Landlord and Tenant, on +44 (0)20 7544 2043, or email me at rnewsome@nbrealestate.co.uk. I look forward to hearing from you.