Definition Consulting

Positioning > Process > Profit

Case Study: Atrium International

Atrium International, Warsaw, Polandatrium-warsaw-interior

Task
Overcoming a 50% void in 27,000sqm office / mixed use development at a time of great excess supply and falling rents. Then re-brand the building, train in-house lettings staff, create, launch and run a marketing campaign.

Massive over-supply to the Warsaw office markets saw rents fall by 70% in 2004/05 and, even then, tenants few and far between. A series of physical improvements to the building, first identified as necessary by me and others at Portico when assessing it five years earlier, were being implemented but were clearly unlikely to be enough.

The solution was multi-faceted, but focused on pinching market share from the only successful sector in town.

Much of the empty space being renovated was, at the suggestion of the Construction Director, adaptable to accommodate smaller and more specific size lettings. Building on this, my contribution was to identify and stress the comparative success and high rents being achieved by the serviced office sector, despite most of their lets being for one or two years with very few services included without extra charge. If we could achieve double the rent for lettings little shorter than the three year Warsaw standard, might not the lower quality covenants be acceptable?

Embracing this ides with typical energy, the Portico CEO immediately poached two members of Regus’s Warsaw team and allocated space and a sizable budget for an impressive conference / meeting rooms / reception area.

Results
The results were significantly better than our highest hopes, mainly because a serviced operator came forward willing to take space at the double rent and then sub-let to smaller, shorter-term tenants, thus avoiding the intensive management which was our principal concern. The Conference Centre, meanwhile, has proved to be a highly popular facility with new and existing tenants and has produces profits which exceeds its area rental equivalent, whilst enhancing the overall value of the building to its tenants.

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