Towards a Framework for Sustainable Landlord & Tenant Relationships

1. Towards a Framework for Sustainable Landlord & Tenant Relationships Selma Carson and Chris Fortune University of Salford

2. Introduction The Four Pillars of Successful Property Management (Carson 2011) Selma Carson 2012

3. UK Occupier Satisfaction IndexProperty Industry Alliance & Corenet ** Basis of survey changed 2010 Selma Carson 2012

4. Occupiers’ Views • Responsiveness varies tremendously. Some landlords are very good at coming back to us with consents; others take forever and demand an arm and a leg.” • “More contact from landlords would be good. When we do sit down with a landlord it can really improve the relationship.” • (OSS 2009) • Sustainability remains an important issue for occupiers, who gave this factor the lowest score and feel landlords still have a lot to improve upon in terms of interaction with them on this issue. • (OSS 2011) • “talking, listening and engagement between landlords and occupiers” emerged as the single most important change required in the industry • British Council for Shopping Centre conference 2010 • “somewhere….sits the occupier, without whom any property asset ceases to have any purpose or value” • (Varcoe, 2011) Selma Carson 2012

5. Landlords’ Views • “occupier retention and hence cash flow is right at the top of the agenda. The relevance of [our] initiatives has never been higher and the impact …never more pronounced” • (Paul Harding, Real Service Group, 2011) • a survey of investors identified obsolescence and retention as the top two priorities, above voids, rental and yield levels and rental growth • (GVA Grimley, 2010) • “Occupiers need efficient workplaces and are not shy in asking for what they want. Developers need high-quality occupiers. Because property has risen up the corporate agenda, landlords and tenants need to foster a true partnership approach as this will benefit both parties.” • (Jones Lang LaSalle Offices 2020, 2012) Selma Carson 2012

6. The Quality of Relationship • Quality • Tangibles, reliability, responsiveness, assurance, empathy Gap between perceived service and expectations (Ladhari, 2009) • Technical, contractual and social bonds • Commitment, ethical profile, sharing of information, communication, conflict, balance of power, personal attributes (Rasila, 2009) • Customer satisfaction • Deconstruct to individual experiences, subjective response to direct and indirect touch-points (Meyer and Schweger, 2007) • Turning satisfaction into positive outcomes • Effect of keep, push and pull factors on satisfaction and loyalty (Appel-Meulenbroek, 2007) Selma Carson 2012

7. A Partnership Approach? • Number of stakeholders involved • Role - seniority/influence - decision-making powers • Shared understanding and vision • Relevance of CSR policies • Can relationship override contract? • For the long-term, not only in difficult market conditions (Roussac & Bright, 2009) (Crosby, Hughes & Murdoc, 2005) (Leishman et al, 2003) (Thompson & Ke, 2012) Selma Carson 2012

8. Relational Bonds in Practice • Technical/operational/functional • make it easy – to upsize/change/operate business effectively • Contractual • throw lease in back of cupboard – supplier and customer • Social • entertainment, use customers’ business where possible • Impact: • 82% “own”, 47% “inherited” cf 30% industry-wide retention at lease renewal. (IPD/Strutt & Parker, 2005) Selma Carson 2012