At Ray White Commercial (SC), we often say that relationships are at the heart of what we do. This ethos was truly put to the test, and ultimately affirmed, with one of our valued global retail clients.
The Initial Partnership & Unforeseen Pressure
For a considerable period, we had the privilege of managing numerous of this global retailer’s crucial retail and commercial properties across Sydney and NSW. Our dedication to a bespoke service, aligned with their investor requirements, ensured their assets were managed to maximise value. We provided comprehensive asset management services, leveraging our experience in law, finance and asset management for seamless operations oversight, all designed to deliver the most advantageous outcome for their portfolio.
However, in mid 2023, an external directive from their global headquarters created a significant challenge. Mandated to reduce operational costs, our client was compelled to seek lower property management fees across their entire Australian portfolio. Despite our proven track record and deep understanding of their unique needs, the immediate pressure for cost savings became the driving force.
The Tender: A Moment of Calculated Risk
We submitted a comprehensive proposal, showcasing our expertise and the tangible value we bring, from our property accounting rigour to our strategic asset management advice. However, the tender was ultimately awarded to an operator, whose offer came in many multiples below our proposed rate and the local team were forced to follow global orders. It was a clear demonstration of how immediate cost considerations can, at times, overshadow long-term value.
The Unforeseen Consequences: The True Cost Emerges
Within just 12 short months, the profound impact of this decision became undeniable. The initial ‘savings’ quickly evaporated as the client grappled with escalating operational issues across their portfolio:
The Resounding Return: Value Recognised, Partnership Restored
By April 2025, the reality was stark. The client, acutely aware of the true cost of underpriced management, reached out to Ray White Commercial (SC). They acknowledged that the initial financial ‘gain’ had been comprehensively eclipsed by operational inefficiencies, hidden costs, and considerable internal strain.
This wasn’t just a return, it was a re-affirmation of partnership. Not only did they agree to revert to our initial fee structure, but they also, critically, entrusted us with the management of their entire state portfolio in New South Wales providing numerous additional properties. It was a powerful vote of confidence in the enduring value of our strategic, relationship-focused approach.
Reflections: A Testament to True Value
At Ray White Commercial (SC), we are dedicated to understanding your investment aspirations and equipping you with the crucial insights needed for informed asset decisions. This case demonstrates that while initial cost pressures might influence tender outcomes, the enduring value delivered by a truly dedicated and expert property management partner is what ultimately proves to provide the best value and strategic choice for your investment. We pride ourselves on maximising asset performance, mitigating risk, and fostering strong relationships. We are proud of every transaction we undertake.
Background: For years, a building managed by another agency struggled with vacancies. Four shops sat empty for over three years, and one for more than five years. The previous efforts to fill these spaces had fallen short, leaving the building underutilised and impacting its revenue. Our Approach: When we took … Read more
Discover how Ray White Commercial (SC)’s strategic acumen and deep industry expertise turned an immensely complex tenant insolvency situation into a triumphant victory, reaffirming the power of proficient asset management.