LETTINGS & MANAGEMENT | Commercial Warehouse & Block, Commercial Road, Whitechapel, London

In this case study, we explain how we turned a loss making commercial building into a profitable site, generating over £600k per annum in rental income for the landlord.

 

Reality Properties was approached by the freeholder of a substantial property on Commercial Road, Whitechapel, London. 

The building spans five storeys, including a basement, ground floor, and three upper floors, totalling approximately 32,000 sq ft with entrances from three different streets. 

The freeholder utilised the 8,000 sq ft triple-height basement for his fashion business.

 

 

 

At that time, the majority of the building was vacant, featuring two inoperative passenger lifts, stained carpets and walls, a non-functional fire alarm system, non-compliant fire safety measures, and sporadically working lighting in the common areas. The offices on the upper floors were outdated and mostly unoccupied.

 

 

When our Director proposed leasing the building at record-high rental rates, the freeholder was initially reluctant, stating, “Son, I find tenants to be a headache, I don't need the money and so I find it less hassle to leave the floors vacant.” Our Director responded by highlighting that while the freeholder might not need the rental income now, he would soon appreciate the benefits of a steady income stream and regret leaving the property vacant.

 

Reality Properties was given the opportunity to lease the building, which we successfully did at record rental rates for the area. Our guerrilla marketing tactics, ability to identify the best tenants, and expert negotiation skills led to near full occupancy and a rent roll exceeding £0.6 million per annum.

Shortly after, the freeholder requested Reality Properties to take over the collection of service charges and manage repairs and maintenance. The freeholder believed the service charges amounted to around £40k annually but was only collecting about half of that. 

 

Our detailed analysis revealed that the true annual expenditure to operate the building correctly was actually £95k, meaning the freeholder had been unknowingly subsidising £75k of the service charges out of pocket.

 

 

 

Since then (2009 to today), Reality Properties has managed the building effectively, collecting rent and service charges accurately, handling all maintenance issues, lease renewals, business rates, and local authority matters. Over the past few years, the building has undergone a makeover, including upgrades to all services such as lifts and fire prevention measures.

 

The building was transformed from a tired, dated, unwanted space into a thriving hub for businesses small and large.

 

Our Directors bring decades of experience in managing complex estates. We specialise in crafting innovative strategies to maximise rental income while minimising overheads. Let us do the same for you. Contact us today to discuss your property.