Level Three - Example Two (Croydon) Flashcards
What was your marketing strategy that you recommended?
discuss with client what their target was and how that aligned with our opinion. - different fit outs - do we want to refurb etc?
if in strong location - requirements list
targeted marketing to specific retailers
linkedIn post and pipnet etc
How did you assess the covenant?
Creditsafe
Are you qualified to advise on covenant strength?
No
What considerations led to your client accepting the offer at the quoting rent rather than the higher offer?
Although one offer was above the quoting rent, the company making the offer was newly formed, which presented a higher risk. The second offer came from an established company with experience in the area and a longer-term lease commitment, which aligned with my client’s objective of securing a reliable tenant.
How would you handle a situation where a client prefers a high-risk offer against your recommendation?
TBC - their choice no matter what, but my responsibility to make them aware of riskiness
In the Croydon subletting case, how did you determine the marketing strategy to attract long-term tenants?
Given the client’s objective of securing a long-term tenant, I focused on reaching well-established businesses that had a proven track record of stability. This included targeting retailers already operating in the area but seeking to expand. I used online platforms alongside local networks to ensure the property was marketed to suitable candidates.
You said you selected a more established company over a newly formed company, what are the downsides of a lease being taken by a new company?
- No financial performance
- Risk of tenant failure
What can you do to mitigate the risk from a new company?
- Rent deposits / guarantors
How did you assess the two tenant covenants?
Local covenant - creditsafe.
New company - rent deposit etc
Why did you recommend a sub-lease over an assignment?
The passing rent was much higher than what would be achievable. Rent was 53k
What is the benefit of a longer lease to your client?
- Guaranteed income for a longer period of time
Why was the passing rent not achieveable?
When they took on the unit, it was a proper high street, only buses go down there now. I was fairly certain that rents would not go back to where they were. This was the only interest we could get.
