Rent Reviews: optimizing your location
Our client is Syntrus Achmea Real Estate & Finance, the landlord of Hoogstraat 19-21 in The Hague. Since 2004, Petit Bateau is the tenant of this store, leasing it for an indefinite period of time as of 2013. The rent level of the store has not been adjusted since the lease commencement date, whilst an analysis of the rental database shows that rent levels in the area have increased significantly. Landlord has asked Cushman & Wakefield for a quick scan and an advice with regard to rent review as well as lease optimizing opportunities for this particular location.
Cushman & Wakefield made an analysis of the market situation and rent levels in the shopping area of Hoogstraat in The Hague, which is achieved by analysing market data, market sentiment as well as comparing retail spaces in the direct vicinity. Based on the findings, Cushman & Wakefield offered Syntrus Achmea Real Estate & Finance a grounded and well-supported advice covering:
- a substantial rent increase;
- a new lease agreement comprising a new (longer) firm lease term.
Following this advice, Cushman & Wakefield started rent review and lease term negotiations with the existing tenant Petit Bateau on behalf of the landlord.
The negotiations with Petit Bateau have ended in a rent increase of approximately 25 percent as well as a new firm lease term of 5 + 5 years, which led to a significant increase in market value of the premises. This optimization result brought our client – Syntrus Achmea Real Estate & Finance – subsequently a long-term healthy return on their investment.