Property Asset Management
Office premises in properties from the 1980s can be difficult to let – especially if the property is outdated and located in an area of Copenhagen where the commercial letting market is fiercely competitive.
This was the case for Søborghus – a large office property of almost 10,000 square metres on Gladsaxevej in Søborg owned by one of Denmark’s largest property owners, DADES A/S, and wholly managed by Newsec. Following a period of increasing vacancy rates, 40 per cent of the property’s premises were vacant in 2016.
Newsec was in an ongoing dialogue with the owner, DADES, about the challenges of the property. One solution was to lower the square metre price drastically. However, this was not an ideal solution from an investment perspective, as it would reduce the value of the property.
Consequently, Newsec initiated a new strategy and business plan for the property, comparing investment requirements with the potential value increase achievable from higher rents and lower vacancy rates.
Following additional analyses, Newsec presented the new strategy and a long-term business plan to the client – including plans for upgrading the building. DADES decided to proceed with our proposal and invest in modernising the property to make it more competitive.
The renovation and modernisation were carried out over six months with Newsec's project department acting as project manager, while the operation and maintenance department was in charge of cleaning and upgrading the outdoor areas.
The property looked completely up to date after the upgrade, and Newsec's letting department could immediately sense the effect in their dialogues with potential tenants.
Following the upgrade, Newsec's letting department succeeded in letting nearly all the office space within 12 months. Vacancy rates fell from 40 per cent to just 7 per cent, and rents were increased by 16-20 per cent compared to the 2016 level.
Newsec's services in connection with the project included: