Property owners who offer high-quality service have tenants who are more satisfied with their premises and apartments, and they are also more willing to recommend their landlord. This is clearly evident when AktivBo conducts factor analyses of tenant responses in their clients' surveys. But can management characterized by a high level of service, where tenants feel valued and heard, lead to lower operating costs and improved profitability? The short answer is yes!
Research by Professor Danielle Sanderson at UCL (University College of London) shows that a one percent increase in average tenant satisfaction, increased the annual total return among commercial property investors in the UK by almost two percent.
Her research also shows that a high level of service makes it easier to attract and retain tenants. It is significantly cheaper to retain existing tenants. By offering high-quality service, you can increase tenant loyalty and thus reduce the risk of vacancies and empty premises and apartments. According to a report from CBRE, on average, it costs five times more to find a new tenant than it does to retain an existing one.
In AktivBo's annual report This is what Sweden's commercial tenants think over 6,000 commercial tenant survey responses are analyzed. The report shows that a majority (88 percent) of tenants would primarily turn to their existing landlord when their needs change. But even though there’s many of them, it also means that 12 percent would not. This can lead to significant economic risks and potentially increased costs for handling move-outs, move-ins, and premises adjustments.
A property owner who focuses on high service and quality can also achieve an increased property valuation. In Sweden, for example, Botkyrkabyggen has successfully increased the valuation of its properties by focusing on improving its service and management quality. Additionally, consulting firm Deloitte argues that property owners who focus on customer satisfaction have lower maintenance and repair costs because tenants are more likely to take care of the property.
In other words, it is clear that property companies who prioritize high service also benefit from it in several ways.
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