Creating a symbiotic relationship between commercial landlords and tenants is essential for long-term success in the property industry. A collaborative, win-win dynamic enables both parties to thrive. Tenants can grow their businesses, while landlords benefit from stable, income-generating investments. Unfortunately, the reality is often quite different. All too frequently, the relationship becomes adversarial where landlords push for excessive rent demands, while tenants fight for reductions or demand financial incentives or breaks.

Trust and Transparency
Twenty years ago, early in our business journey, we recognised the value of building strong relationships with tenants. From the beginning, we committed to supporting our occupiers across various rental sectors, taking time to understand their needs and fostering trust. This long-term approach has played a significant role in The Harkalm Group’s growth. As our tenants have expanded, so too has our portfolio.

We operate with transparency. We're open with our tenants about the rent levels we require to make an acquisition viable. If we can negotiate a deal where the rent is lower than expected, we pass those savings on to our occupiers. This creates a mutually beneficial dynamic that supports their expansion and helps us progress our own investment plans.

Navigating Change
Markets evolve, and sometimes conditions get tough. The high street has faced huge shifts over the past ten-15 years and the decline has continued. A strong landlord-tenant relationship has been essential to weather such changes. COVID-19 was an example where the situation really came to a head: tenants needed rent relief to survive, while landlords needed tenants to remain in place to protect asset value.

Sadly, many landlords mishandled the situation, with some choosing litigation or attempting to squeeze every last penny out of occupiers. In many cases, trust broke down. Some of those landlords ultimately paid the price through tenant defaults and vacant properties. Suddenly they were stuck with an empty property which they could do little with. In contrast, those who worked collaboratively were able to protect their investments and emerge stronger.

Adopting a Growth Mentality
The alternative to short-termism is a growth mentality. With trust in place, landlords and tenants can partner to seize new opportunities. A long-term view allows landlords to bring properties and opportunities directly to trusted tenants for open discussion. In return, operators have the chance to access sites which may not ever reach the open market and therefore grow with confidence, knowing their landlords are committed to their success.

Technology like AI and site-finding tools has advanced, and we love the benefits it brings. However, no tool can replace the value of genuine relationships. Only by staying close to our tenants can we understand what they really need and deliver. In return, this opens doors for us to expand our portfolio with purpose and confidence.

It Must Work Both Ways
That said, relationships must be reciprocal. While landlords must offer reasonable rent packages that allow tenants to operate and grow, tenants must also understand the realities of property investment. An inability to pay rent - or expectations of flat or declining rents - undermines the long-term viability of any investment.

Similarly, three-year break clauses might suit tenants but make funding and long-term planning nearly impossible for landlords. They erode the security necessary for sustainable investment. We believe tenants should provide meaningful security in leases, while landlords must offer fair terms and packages that support occupiers to thrive and fulfil long term contracts.

Adapting to Sectoral Shifts
We’re well aware that sectors change. Retail is not what it was. That’s why we’ve diversified into areas like education, where 20-25 year lease terms are the norm. The key is staying close to both your tenants and the market, adapting when needed and planning ahead.

One Reputation, One Strategy
As a medium-sized PropCo, we know we only have one reputation in this industry. We protect it by prioritising long-term, productive, and trusted relationships. These relationships are the foundation of prosperity for both landlords and tenants. There is no room for short-termism. When we grow together, everyone wins. As a result, our team has been acquiring properties and land across the UK for over 20 years. When we identify an opportunity, we know is right for us, we proceed quickly with a streamlined, no-nonsense approach. Our strong relationships with our tenant operators have been key to our success over the years, through both the good and bad times.