Challenges & Creativity
backProximity to tenants as an asset
Published: 12. June 2023
Portfolio and asset management is an important pillar of HIAG's business model. Here, the real estate portfolio is maintained and, where possible, earnings are increased. One of HIAG's strengths here is the close exchange with tenants - a valuable factor in avoiding vacancies.
How do I keep the yield stable and optimise it? That is the basic question in portfolio and asset management. "To do this, all economic conditions must be analysed and appropriate measures must be taken," says Béatrice Gollong, Head of Portfolio and Transactions, part of the Executive Board since 2023. She describes this task with a smile as "back-breaking work" that requires creativity on the one hand and economic-analytical know-how on the other (see interview).
Close coordination of all areas
HIAG develops a strategy for each site. Based on this, for example, structural measures are implemented, conversions are initiated and, finally, suitable tenants are sought. An important principle is the diversification of uses and tenants. The integrated business model - site development and marketing as well as asset management and property management go hand in hand - is one of the factors with which HIAG scores in the market. Coordinated interdisciplinary cooperation is important. "Depending on the task, one department has the lead and responsibility at one time, and another at another time," says Béatrice Gollong. Marketing, asset management and internal management in particular work closely together.
Adapting the offer to needs
In marketing commercial buildings, HIAG differentiates between re-letting existing buildings, buildings that are adapted to the needs of future tenants (built-to-suit), and approved new buildings for which tenants are sought even before construction begins. In the residential sector, there is also the marketing of condominiums and rental flats, such as the current CHAMA site in Cham. Here, HIAG had the opportunity to acquire existing commercial properties and building land - all in a beautiful, preferred location with a view of the countryside and right next to a park near the Lorze River. HIAG wants to create a place to live and work with plenty of open space and modern infrastructure. In the first construction phase, 52 condominiums and rental flats will be built. A total of around 140 new flats and 3,000 square metres of modern service and commercial space will be built by 2024, most of which has already been leased to a serviced flat operator. In a second construction phase, further buildings will follow, which are currently being planned, and the typology and materialisation of the flats are currently being defined.
«The average lease term was increased to more than eight years and the vacancy rate was greatly reduced.» Béatrice Gollong, Head of Portfolio and Transactions
Designed for the long term
In general, the focus in asset management is also on finding users for commercial space and retaining tenants for as long as possible. This is particularly important with large tenants, the so-called anchor tenants. HIAG has made great progress in this area in recent years. The average lease term has been increased to more than eight years. Compared to the rest of the industry, this is a good value, says Béatrice Gollong. One of the reasons for the long lease duration is "that we maintain a close exchange and are thus very close to the tenants and pursue the built-to-suit approach for the tenant in the development". It is always important to keep an eye on the duration of tenancy agreements and to talk to the tenants at an early stage. If necessary, contracts have to be renegotiated. "And if spaces are vacant, it is necessary to ask what measures need to be initiated and implemented to find a new tenant and ideally increase income in the process." In most cases, he says, repositioning the property or at least refurbishing it is necessary to attract new tenants.
A decisive advantage is that HIAG manages the sites itself and, in the case of larger sites, has employees on site. In Aathal, Dietikon, Dornach, Biberist, Yverdon and Meyrin, HIAG operates its own management sites with a team. "Our local farmers often speak of 'their' sites," says Béatrice Gollong. This is not because they have ownership claims, but because they identify so strongly with the sites. The tenants also benefit from this presence. They have the opportunity to talk to HIAG in person and find solutions if necessary. When some of them got into financial difficulties during the corona pandemic, HIAG accommodated them in an uncomplicated manner - which would hardly have been possible without direct contact.
3 Questions for Béatrice Gollong, Head of Portfolio and Transactions
What is the biggest challenge in portfolio and asset management?
The primary goal is always to keep the vacancy rate low. This is back-breaking work that also requires creativity. It's a matter of putting the right product in the right place with the right measures. This ranges from broadly elaborated marketing measures to targeted tenant searches,
where you sometimes have to pick up the phone and speak directly to potential tenants.
What is HIAG's strength?
In addition to our broad experience in the conversion and repositioning of sites, it is our special proximity to the tenants. We see them as partners and are in close contact with them. This means we know their needs and can, for example, anticipate tenant changes at an early stage. Another advantage is our integrated business model. Development, realisation, marketing, asset management and property management go hand in hand at HIAG. And we are characterised by a high degree of identification with the sites.
How do you create this identification?
HIAG usually manages the sites itself and, in the case of larger properties, is present on site with employees who take care of the management. HIAG usually manages the sites itself and, in the case of larger properties, is present on site with employees who take care of the management and technical facility management. They work with great care and dedication and listen to the tenants' concerns. They look after their premises almost as if they owned them themselves!
