Queenstown businesses now have a hired gun who’ll go head-to-head for them against hard-nosed commercial landlords.
Doug Jacques, 52, says he’s the resort’s only “buyer’s rep” in commercial leasing.
“I help people looking for space, I help them secure that space and negotiate their lease,” he says.
While rents have gone down and inducements abound, there’s more to a leasing deal than just the rent, Jacques says.
“Like rent reviews and rachet clauses – if the market goes down, tenants on rent review should be able to have their rent go down as well. But most tenants have negotiated rachet clauses so once it goes up, it can never go back.”
Don’t expect too much help from your lawyer or listing agent, Jacques also warns.
Businesses taking out leases usually bring lawyers in too late – the deal’s already been done “and potentially something binding already signed”.
Agents listing space represent landlords – “so the higher the rent the tenant pays, the more money that agent makes”.
Jacques also has something to say about resort rents.
“As a percentage of tenant turnover, rents here are probably the highest in the country.
“Landlords are getting some amazing rents – in the key square of Queenstown they’re comparable, even higher, than Newmarket and Ponsonby in Auckland.”
Jacques recalls entering commercial real estate as a young man in his native Canada when rent was usually less than 10 per cent of a retailer’s turnover – and four to six per cent for restaurants.
“Now, for some reason, the needle’s shifted and it’s unusual to see rents under 10 per cent and we’re starting to see a lot in the 15-16 per cent range,” he says.
The increase has “stolen the profit of these businesses”, Jacques alleges, making retail far tougher now.
“You’ve got to do your damnedest to keep your rent below 10 per cent of turnover.”
His fees start around $5000 “for a very small, easy situation”, Jacques says, and with rents being so high he can often make “significant savings” for clients.
Jacques, separated from Emma Hill – daughter of jewellery magnate Michael – formerly managed The Hills private golf course and other local non-jewellery Hill assets.