Ten­ant wanted

Ti­mothy Sam­mons in­tended to start his ca­reer as an en­gi­neer af­ter univer­sity, but he chose a com­pletely dif­fer­ent path

Destiny Man - - BUSINESS CLINIC -

Sam­mons’s pas­sion for prop­erty be­gan as a child, but de­vel­oped as he be­came in­ter­ested in city re­vival and gen­tri­fi­ca­tion. “My busi­ness part­ner, Jeff Kleu, has a sim­i­lar pas­sion for cre­at­ing great spa­ces for peo­ple. Cap­i­tal Point Prop­er­ties pro­vides bro­ker­age and a plat­form for com­mer­cial leas­ing and sell­ing of prop­er­ties. We aim to be the an­swer for any busi­ness that has prop­erty needs.”

THE SUC­CESS

Break­ing into the highly com­pet­i­tive Rose­bank, Johannesburg, mar­ket has been a highlight for Sam­mons. “We ren­o­vated an old build­ing, which in­spired changes to the en­tire area. See­ing Rose­bank come alive be­cause of this cre­ated a great sense of ac­com­plish­ment,” he says.

THE CHAL­LENGE

Find­ing qual­ity op­er­a­tors to fill spa­ces is prov­ing to be dif­fi­cult. “We need in­ter­est­ing, new con­cepts to sup­port the spa­ces we cre­ate. Empty spa­ces and not re­main­ing rel­e­vant equal a loss of in­come. Cur­rently, we try pop-ups – which are suc­cess­ful – or ap­proach­ing ten­ants di­rectly. But what else can we do to im­prove this process?” asks Sam­mons.

CLIMB OUT THE BOX

Lebo Mot­she­goa from Foshizi says it’s im­por­tant to un­der­stand target mar­kets. “This makes it eas­ier to talk to them, sell to them and, con­se­quently, know where they are. It also in­di­cates in­come brack­ets and af­ford­abil­ity. In this com­pet­i­tive mar­ket, it’s also es­sen­tial to re­search com­peti­tors to avoid los­ing busi­ness to them.”

With this un­der­stand­ing, there are dif­fer­ent ways to find the right ten­ants. “If you know your target mar­ket well, you should know which ar­eas they come from. For ex­am­ple, many stu­dents are look­ing at Rose­bank, but you need to mar­ket to their par­ents as much as to them.

“A let­ter of in­tent doesn’t re­quire fi­nan­cial com­mit­ment, but of 10 such let­ters, at least one or two will fol­low through.”

“Also, don’t waste time look­ing for only one kind of ten­ant. Rather have three op­tions for your so­lu­tions. Think of it as hav­ing Rolls-Royce, BMW and Mercedes of­fer­ings for po­ten­tial ten­ants.”

Lastly, if you’re seek­ing in­no­va­tive busi­nesses, look at places where changes are hap­pen­ing. “If Rose­bank isn’t of­fer­ing as many of those busi­nesses, it might be time to con­sider other ar­eas – for ex­am­ple, Wa­ter­fall Es­tate, which is at­tract­ing peo­ple from around the coun­try. Al­ter­na­tively, con­sider pop­u­lar trends, like hot-de­sk­ing, in the prop­erty en­vi­ron­ment; nowa­days en­trepreneurs run busi­nesses from cof­fee shops. These are great op­por­tu­ni­ties,” says Mot­she­goa.

DI­REC­TION IS KEY

Theo Sibiya from AT Kear­ney be­lieves Sam­mons’s busi­ness has fan­tas­tic long-term po­ten­tial for suc­cess. “Break­ing into the highly sought-af­ter Rose­bank mar­ket is a big achieve­ment. Re­de­vel­op­ment and trans­for­ma­tion have made of­fices there more ex­pen­sive than in Sand­ton.”

He agrees that know­ing your target au­di­ence is es­sen­tial. “Use this analysis to se­cure com­mit­ments from po­ten­tial ten­ants be­fore start­ing re­de­vel­op­ment. It en­sures that value propositions are clear and prop­er­ties can be based on spe­cific needs. A let­ter of in­tent doesn’t re­quire fi­nan­cial com­mit­ment, but of 10 such let­ters, at least one or two will fol­low through.”

Sam­mons should also use spe­cific chan­nels to find spe­cific ten­ants. “Pop-ups are use­ful, but don’t al­ways at­tract long-term in­ter­est. Con­sider prop­erty ex­pos and com­mu­nity events. Un­der­stand where you sit in the eco-sys­tem to find the right ten­ants. Draw ten­ants quickly by of­fer­ing at­trac­tive ben­e­fits, like a first­month rent hol­i­day. Each month a build­ing stands empty in­creases the risk of fail­ure in this in­dus­try.”

Sam­mons should also con­sider low-vol­ume, high­qual­ity sourc­ing. “On­line sites pro­duce hun­dreds of weak leads. Look at places like in­no­va­tion incubators [see along­side] to find in­no­va­tive busi­nesses.”

Sibiya com­mends Sam­mons on his en­ter­pris­ing at­ti­tude. “He has the spirit of ad­ven­ture nec­es­sary for this en­vi­ron­ment.”

Theo Sibiya, Part­ner and Di­rec­tor of AT Kear­ney. Tel: 010 492 5100. Visit: atkear­ney.com

Lebo Mot­she­goa, MD of Foshizi. Tel: 011 234 7003. Visit: foshizi.co.za

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