How Skootr can help companies reduce lease exposure and save costs
In today’s economic flux and fluctuating business landscape, the need for companies to be agile is critical when it comes to capturing growth opportunities whenever and wherever they arise.
This also means being able to scale up or down to remain profitable without a dent in their operations. At such times, getting locked into long-term, rigid office leases — regardless of what the future may hold — can be akin to taking a leap of faith.
A case in point is one of our clients. They were a large consulting company in the process of setting up a new office in another state where they were planning to house-up a part of their current team. The problem? They were saddled with excess office space that they couldn’t shake off because they were locked into a lease for another five years.
It would be a massive drain on their company’s resources. The developer refused to budge-in, while costs associated with early termination meant it wasn’t an option either. Moreover, they still needed an office in their current location — just not as spacious.
When the company approached Skootr, they wanted to know if we could help cut down their committed rental cost. Here’s what we did.
We found that the company had 100,000 sq. ft. of office space on their hand for which they were paying one crore in monthly rentals (at the rate of Rs.100 per sq. ft.). But now they wanted to downsize to 50,000 sq. ft.
Our first step was to help our client get out of the lease without losing any money over penalties. For this, we convinced the developer to modify the contract and replace our client’s name on the lease with ours. Because property owners prefer tenants with long leases to ensure a steady income from rentals, this was a win-win.
Next, we signed a 50% service agreement with the client, according to which they would have to pay rentals for only 50,000 sq. ft. — just as they wanted. With this, we were able to translate this deal into a significant savings of Rs.50 Lakhs per month for the company.
Skootr offered the remaining 50% managed office space to other clients with suitable requirements.
Conventional property leases can hardly compete with the managed office models like Skootr in giving companies the freedom to be as flexible as they want — be it relocating, expanding, or shrinking as necessary.
In the above case, we not only helped the company save critical costs but also become more agile. While using the set amount of space, if they needed to scale up, Skootr could provide additional square footage. Furthermore, they benefited from our suite of services that includes world-class design, furniture, electricity, high-speed internet as well as administrative and cleaning staff — all available for a monthly cost. They didn’t have to worry about maintenance or paying office bills because everything is covered in a single monthly package.
If you’re looking to downsize or simply wanting to save on high rental costs, please get in touch with Skootr to discuss your options.