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ALL THAT TENANTS WANT

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“To be or not to be” occupying current leased areas? Traditional survey conducted by Cushman & Wakefield and OfficeNext has proved that most of Russian tenants prefer “to be”.

Denis Sokolov, a Partner and the Head of Research Department at Cushman & Wakefield Russia presented the results of “Perfect office” survey at Office&Design Dialogue held on May 21, 2015. 95 Russian and international companies were participating in the survey.

66% of surveyed Russian tenants turned out to be quite happy with occupied premises while most of international companies (56%) would be delighted to change working environment. The research proved that premium level offices are mainly occupied by international tenants: 52% of them were found to rent A-class offices, however only 18% of Russian tenants occupier high-class premises. Rental rate currency is define in a corresponding way: 66% of international occupiers are charged fees in foreign currency, 78% of respondents pay rent in roubles.

Compared with the previous year tenants have become more demanding to occupied spaces, showing growing discontent about almost all of buildings’ capabilities despite of technical ones (quality of telecommunication and ventilation). Denis Sokolov says: “Tenants are not as happy with offices quality as they were before. We assume this is due to changes in emotional background, and thus, in vision of prestige”.

According to C&W and OfficeNext survey tenants still define 4 main guiding features to choose building: rental rate, location, transport accessibility and understanding owner. Prestige value has become more credible for tenants which is no wonder considering that the respondents are not happy with quality of their offices. Besides, tenants have become more demanding to fit-out.

“Fear factor” is still the same both Russian and foreign companies are mostly scared of poor management. They have become a little less frightened of rental rates increase. “Apparently tenants have realized that office market is oversupplied and lessors are now under pressure” – Denis Sokolov says.

Rouble exhcange value is merciless to tenants and this makes rental rates decrease issue a hot topic. C&W and OfficeNext survey was aiming to find out whether tenants managed to adjust to the situation or not. Only 37% of them did not try to agree on lease agreements revision. 31% of all respondents managed to agree on more favourable lease terms, and only 14% failed to do it. 18% of surveyed tenants are still in talks with lessors. So most of owners, are as a rule, ready to reconsider lease terms.

Generally tenants see one main way out of this challenging situation. Respondents consider that the most effective strategy to follow is to revise leasing terms of occupied offices and at the same time to reorganize office area. Relocation to another business center is considered to be less practical. Respondents do not intend to acquire office premises or to sublease areas.