Managing leases with foresight
Renew contracts, return spaces, negotiate conditions: to exploit the potential of its space more effectively and reduce costs, a German financial service provider is relying on proactive portfolio management.
1,400 locations throughout Germany
Cost savings & more flexible space
Office and retail
The best strategy? React flexibly, optimise continuously and, above all, act in a proactive manner.
Stay or go? This decisive question applies not only to relationships, but also real estate management if a company is to maximise the potential of its own portfolio. Should it keep the location or move to another? Or would it be better to renegotiate the lease? Those responsible at a German financial service provider with approx. 1,400 branches and office properties face these important decisions time and again – and for many years they have been advised and supported by JLL. The goal is to position and manage the portfolio well, as well as continuously adjust it. And not just in a proactive manner, always with an eye on the market and its trends, but also in the short term when conditions change. This will enable cost savings and ensure that the necessary flexibility is maintained.
From individual leases to portfolio strategy
In Hanover, for example, a fast alternative had to be found for a branch that was due to shut because the lease was about to expire. After numerous discussions and contract negotiations, JLL was not only able to reach an agreement with the landlord on an extension for the branch, but also an arrangement by which they will be able to move back in after development of the project, which is temporarily taking place at this location.
In Kiel, the issue regarding the location had already been clarified when JLL became involved. The branch had moved to a larger location; the lease, however, still ran for another 5 years. JLL was to organise the speedy return of the vacant space. The Corporate Solution Team negotiated an especially advantageous termination agreement with the landlord: after only four weeks, the space which was no longer used was returned – and the contract specified that this space would not have to be restored to its original condition. A successful negotiation that saved the client approx. 600,000 euros in rent.
Our client in Cologne also saved a low six-digit amount. Using great sensitivity and well-founded arguments, it was possible to convince the landlord of the branch to assume the incurred construction costs.
Cost savings and efficient use of space
A cooperative partnership has many benefits: the finance service provider’s maintenance and management costs are reduced while the efficient use of space in the asset portfolio is continuously monitored and improved. The client can now relax, even when action due dates approach. Together with JLL, the real estate team has repeatedly been able to negotiate cost savings in the six-digit euro range over the past few years. This kind of success proves the value of a proactive portfolio management.