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Lukas Barmettler
Head Competence Center Asset Management
SF Sustainable Property Fund
Improvement of sustainability targets, GRESB assessment and tenant satisfaction through tenant survey
What is the best way for property owners to meet tenants’ requirements in terms of convenience, organisation and sustainability? In order to cover these factors and offer tenants the most comfortable living conditions possible, a broad-based tenant survey was carried out by the SF Sustainable Property Fund in the first half of 2023. In addition to questions on tenant satisfaction, the questionnaire also included ESG and GRESB1-specific content. The results of the survey have already led to initial optimisation measures and consequently to increased tenant satisfaction.
Tenant survey based on ESG and GRESB approach
As part of a master’s thesis in MAS Real Estate Management at the Lucerne University of Applied Sciences and Arts, a tenant survey was conducted in the first half of 2023 among the tenants of the SF Sustainable Property Fund in German-speaking Switzerland. A questionnaire was developed, the survey carried out and the results evaluated in collaboration with the established market research company LINK. In addition to the usual questions on tenant satisfaction, additional aspects relating to ESG and GRESB topics were surveyed. In particular, topics such as the mental, physical and social health of tenants, environmental sustainability and their attitude towards the residential area were new aspects that were addressed.
Added value of the tenant survey
The tenant survey primarily provides important insights into tenant sentiment in the individual properties. This enables any conflicts between tenants to be identified in good time and appropriate measures to be taken to prevent or resolve them. Tenant feedback can help to improve the quality of properties and services (e.g. facility maintenance or property management) and thus reduce tenant turnover. According to a study2, properties with high tenant fluctuation (>20%) have a 5% lower EBIT margin than properties with a fluctuation of less than 10%.
Both the tenant survey and the subsequent optimisation measures were rewarded with points in the GRESB rating. The tenant survey also contributes to the achievement of the fund’s sustainability targets by giving priority to tenant feedback when implementing the measures.
Conclusion: pleasing results with optimisation potential
A total of 763 residential tenants took part in the survey, which corresponds to a response rate of 46.4%. Important conclusions can be drawn from the high response rate. It is pleasing to note that over two-thirds of respondents are satisfied or very satisfied with both their tenant relationship and their apartment. Only around 7% are dissatisfied or somewhat dissatisfied, while the remaining 20-25% are neutral (see charts below).
At 58.8%, the positive satisfaction score for property management is slightly lower, but only around 12% of tenants are dissatisfied or somewhat dissatisfied with their management company. On average, property management companies were rated 6.7 out of 10 points. This is only slightly below the LINK Institute’s industry benchmark of 7.1 points. The satisfaction score for property management in Eastern Switzerland (IBSG AG) is pleasing which, at an average of 7.5 points, outperforms the industry benchmark.
Measures to increase tenant satisfaction
Based on the feedback received, the Asset Management team of SF Sustainable Property Fund compiled a list of improvement measures. Smaller measures in particular, such as checking the job specifications of a caretaker or purchasing another washing machine can often be implemented with little effort. These improvement measures are noticed by tenants, which directly increases satisfaction levels.
Other tenant requirements, such as reducing the heating and ancillary costs or offering electric charging stations, require more effort and longer planning times. In order to reduce heating and ancillary costs going forward, a centralised energy procurement system will be launched with a specialised company from 2024. Thanks to the professional purchasing strategy for heating media and electricity, our tenants will benefit from lower heating and ancillary costs. From 1 January 2024, a partnership was also launched with Energie 360° Ltd, which is responsible for the targeted Switzerland-wide expansion of the e-car charging infrastructure. They will also be responsible for the ongoing operation of the charging infrastructure. These and other measures not only increase tenant satisfaction, but also help to achieve the milestones for our sustainability targets.
1 Global Real Estate Sustainability Index
2 Weber, D. (22 September 2009). Every change of tenant weighs on returns. Handelszeitung. www.handelszeitung.ch/unternehmen/jeder-mieterwechsel-zehrt-der-rendite
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