Advocating for the Tenant at PINZ Government Property Event

At the recent Property Institute Government Property event in Wellington, TwentyTwo’s Dean Croucher joined David White from Government Property Group, Peter Dow (deputising for an unwell Maurice Clark) and Steve Maitland from Colliers to discuss Wellington’s government property market.

Dean took the role of the tenant adviser, David the tenant (government), Peter the developer and Steve the market analyst/forecaster.

Dean opened his address by giving some insight into how the role of the tenant adviser came about by going back 25-30 years when the property market was weighted in the developer or landlord’s favour. The tenant, on the other hand, was generally poorly informed with no in-house expertise and had little involvement in scoping and specifying the building/premises solution. And then, in the early 90’s, came a watershed.

The economy was bleak, a National-led government was cutting government spending and office accommodation was high on the hit list. As a result, a significant re-structure of the Crown’s office portfolio took place and government agencies realised they needed expert advice and someone on their side – someone objective, independent, with no vested interest in the outcome. And so the term ‘advocacy’ – tenant advocacy/tenant representation – was born.

Since then, a revolution has occurred with tenants (including the Crown) becoming a lot more knowledgeable, continued Dean. Their in-house expertise increased and the role of property and the workplace in shaping organisations is now well understood by senior management. It’s become a key strategic role in most large organisations.

Dean then described the current state of play. He gave the procurement industry ‘some stick’ – suggesting the world had become overly procurement focused at the risk of getting the wrong answer – “10/10 for procurement, but 1/10 for the best solution”!

He indicated the challenge was getting the procurement aficionado to loosen the rules to allow a meaningful engagement with the market to ensure good solutions were developed/provided. At the same time, the communication around the client’s circumstances needs to be managed so as not to dilute the tenant’s negotiating position. The negotiation strategy needs to start at the start! A too structured approach or a too unstructured approach both increased the risk of a poor outcome.

He outlined some of the fundamentals to getting a good solution – such as clearly understanding your current position (lease, exit obligations and timeframes), developing your requirements in a robust way (looking at location drivers and other criteria and in specifying the buildings’ features) and understanding your approval process and business case process.

Dean went onto dispel the myth that a negotiation with a developer and landlord is a brutal contest – “it’s more a tango than a fight”! The adviser’s job is to ensure that their tenant covenant/strength is recognised and they get as many benefits as they can relative to the size of the transaction, prevailing market conditions and the relative strengths and weaknesses of both parties.

So, the adviser’s key role then is to help the tenant get the best outcome – minimising risk, while maximising the opportunity a major initiative provides. The adviser tries to challenge the tenants thinking, their needs and their perception of the solution, because the premises/workplace is a perfect catalyst for wider organisational change. Equally the adviser is also a risk manager – trying to provide more certainty and confidence around each small part of the overall jigsaw to make sure the client makes an informed and robust decision – they don’t lease too much space or too little space, pay too much rent, enter into too longer lease for example.

In summary, he concluded, the adviser is… a generalist, wise counsel, a stage manager, a problem solver, a shaper of solutions and a negotiator/deal maker. The adviser brings it all together. Makes things happen. 


Dean Croucher

Managing Director

Thought-leader, creator and collaborator. Dean leads TwentyTwo’s strategic business initiatives, continuously driving our innovation and…
21 December 2016

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