AFIAA
| Client | AFIAA |
|---|---|
| Location | 525 Flinders & 114 William Street's, Melbourne |
| Type | Commercial Office Buildings |
| Area | – |
The background
AFIAA Australia, a prominent investor in commercial real estate, owns multiple office assets across Sydney and Melbourne, with a portfolio valued at approximately $830 million.
In Melbourne specifically, the company manages office properties including 525 Flinders Street and 114 William Street.
These assets were experiencing several existing and upcoming vacancies, prompting AFIAA to seek comprehensive project leasing support.
The challenge
Spillane Property Consulting was engaged to oversee project leasing activities for the Melbourne assets.
Our role encompassed a detailed review of existing agency agreements, assessment of leasing market conditions, and competitive analysis to optimise ongoing leasing campaigns.
What we did
The consulting engagement was structured around several key objectives aimed at maximising leasing outcomes:
Competitive Analysis
Speculative fit out strategy and delivery: Evaluate competitors' strategies regarding speculative fit outs to attract tenants.
Lease deal structures: Analyze both current offers and recently completed lease deals in the market to inform AFIAA's approach.
Review of leasing proposals: Assess leasing interest, including proposals issued for AFIAA's assets over the past six months to identify trends and benchmarks.
Amenity offering: Review competitors' amenities including arrival experience, lobby amenities, flexible coworking options, and end-of-trip facilities to benchmark against AFIAA's offerings.
Market rent and incentive comparisons
Conduct a thorough analysis of market rents and leasing incentives (such as rent-free periods and fit out contributions) offered by competitors to ensure AFIAA remains competitive.
Prospect assessment
Define internal governance requirements for assessing tenant prospects, including financial standing, background checks, and any exclusions based on AFIAA's criteria.
Asset positioning and SWOT analysis
Perform a SWOT analysis to identify strengths, weaknesses, opportunities, and threats associated with AFIAA's Melbourne assets.
Develop a strategic positioning framework to differentiate AFIAA's assets in the market.
The solution
We employed a structured approach to gather and analyse relevant data as follows:
Data collection: Gathered detailed information on existing lease agreements, market trends, competitor strategies, and tenant requirements through industry reports, market surveys, and interviews with leasing agents.
Analysis: Utilised quantitative and qualitative methods to analyse market data, including comparative financial analysis, lease term structures, and tenant demographic profiles.
Reporting: Compiled findings into a comprehensive report outlining strategic recommendations tailored to AFIAA's leasing objectives. The report included actionable insights on lease structuring, tenant engagement strategies, and amenity enhancements.
The outcome
We delivered a detailed project leasing strategy report to AFIAA, highlighting key findings and recommendations:
Competitive insights: Provided insights into competitors' strategies, enabling AFIAA to adjust its leasing approach to enhance tenant attraction and retention.
Market benchmarking: Identified optimal rent levels and incentive packages to align with market norms while maximising asset profitability.
Prospect evaluation framework: Established robust criteria for evaluating tenant prospects, ensuring alignment with AFIAA's risk management and investment criteria.
SWOT Analysis: Outlined strategic asset positioning strategies to leverage strengths and mitigate weaknesses in the competitive landscape.
Conclusion
By leveraging our expertise, AFIAA Australia was equipped with a comprehensive leasing strategy tailored to its Melbourne assets.
The insights provided enabled AFIAA to navigate the competitive leasing market effectively, optimise lease terms, and enhance tenant satisfaction - ultimately driving occupancy and asset value growth.
Market Insights
Matt says
“Commercial real estate markets are inherently complex, influenced by factors ranging from economic trends and tenant preferences to regulatory changes and technological advancements.
For property owners and investors such as AFIAA Australia, understanding and navigating these dynamics is essential to maintaining and enhancing asset value.
This requires more than just market knowledge—it demands a strategic approach that anticipates trends, mitigates risks, and capitalises on opportunities.
One of the key strengths of our strategic consulting lies in its ability to tailor strategies to meet specific market needs and property characteristics.
In AFIAA's case, the consultancy identified the importance of amenities and competitive lease structures, prompting adjustments that enhanced tenant attraction and retention. This bespoke approach is critical in a competitive market where one-size-fits-all solutions often fall short.”
