What do tenants expect from a building these days?
“Tenants’ expectations have evolved radically. Location used to be everything. Location, location, location. Now, tenants look at the bigger picture. Much more account is taken of employee well-being. Buildings have become assets in the war for talent.”
“Architectural quality is also important. More than ever, employees are identifying with their workplace. That’s why the shape and feel of a headquarters building is important to companies. And it’s not just the building itself. You also have to take its immediate surroundings into account, looking for example at access to public transport. Companies want a building allowing multimodal mobility.”
Companies are taking account of their employees, you say. What do employees want?
“Institutional investors don’t buy bricks — they buy a stable source of rental income.”Michael Gheysens Chief Commercial and Business Development Manager at Ghelamco
“Well-being is important. To achieve that, several technical construction factors play a key role, such as daylighting or air quality. That’s what certificates like BREAAM and WELL are all about. It’s standard practice for us to aim for the highest scores here. They’re not just boxes to tick; they’re part of our DNA.”
Are expectations different on the residential market?
“The residential market is different. Many young families moved to city centres in recent years; however, in 2019 the trend has started to reverse in all regional capitals, with more young families moving away than coming in. The reason is quite clear: average rents / purchase prices have gone up substantially. Young people still want to live in the city — they just can’t afford to do so anymore. We’re still looking for opportunities in regional capitals. There, we want to offer affordable living options in the form of extremely centrally located mixed-use housing projects boasting housing units that are more compact and enjoy a wide range of amenities, such as a generously sized communal garden. The central location means that residents have all facilities in their immediate vicinity, something only a regional capital can offer.”
Generally speaking, are tenants and occupants expecting more from buildings?
“Clients have become more demanding. It’s also become easier for them to benchmark and compare on the internet. That’s the case in all industries, but even more so in real estate. After all, it’s a big expense and a long-term investment. So obviously we take account of what our clients are demanding. There’s absolutely no point in building something that no one wants. Better yet, we think about what people will want in five years’ time.”
“During their lease agreement, tenants value the ability to easily and cost-efficiently convert or reconfigure their space.”Michael Gheysens Chief Commercial and Business Development Manager at Ghelamco
How important is flexibility?
“Due to new ways of working, conventional open-plan offices are becoming outdated. During their lease agreement, tenants want to be able to easily reconfigure their space to reflect their organization and/or workflow. They sign an agreement for 6, 9, or even 12 years, but they want to be able to modify the space quickly, cheaply and easily. They don’t want to be hindered by the position of windows or air ducts. You have to anticipate this in the design phase. If you only start thinking about flexibility once construction is finished, you’re too late.”
How else does Ghelamco meet demands for flexibility?
“Our portfolio company MeetDistrict provides services to tenants. They only have to pay for certain services, such as using a meeting room, if they actually make use of it. In other words, that meeting room isn’t included in the rent.”
Lastly, what do investors expect?
“We are seeing that sustainability and, above all, energy efficiency are becoming more important. We have to think hard about what energy standards will be five years from now.”
“But when push comes to shove, the most important thing for investors is the quality of the tenants. After all, investors don’t buy bricks — they buy a stable source of rental income.”