During his appearance on a podcast as part of the Arab Knowledge Lighthouse Initiative for Retail and Shopping Centers, alongside Mr. Hamza Khalid Bannat and Dr. Saleh Jamil Bobo, real estate expert Emad Al-Tayyar emphasized that the concept of real estate leasing is no longer limited to signing contracts and closing deals, but has become a strategic tool that contributes to maximizing the value of real estate assets, building project identity, and achieving investment sustainability.
Al-Tayyar explained that his career, spanning nearly 18 years, has witnessed a major shift in mindset, shifting from a focus on executing lease transactions himself to building integrated lease management systems and establishing policies, procedures, and strategies that guide departments and achieve companies" long-term goals.
He noted that he began his career at Servcorp, a company specializing in serviced office rentals, where he gained hands-on experience dealing with companies and managing day-to-day leasing operations, before moving to JLL, where his responsibilities expanded from managing a single building to overseeing the entire Western Region market, including Jeddah, Makkah, Taif, and Madinah, and working with major real estate developers and international clients across various sectors such as banking, technology, hospitality, and pharmaceuticals.
Managing Office Lease Transactions
He explained that managing lease transactions office leases differs from many other sectors, as it begins with assessing the client’s needs and preparing suitable options, through on-site visits and commercial and legal negotiations, all the way to signing contracts—a process that can take several months due to the multiple stages of decision-making within large companies, unlike the retail sector, where expansion decisions are relatively faster.
He added that the experience he gained in managing deals later enabled him to establish integrated leasing departments within companies such as Al-Balad, Madinat Misk, and Asas Real Estate, by building teams, establishing policies and procedures, and designing operational and technical systems—thereby transforming the role of the leasing manager from a deal executor to a leader who sets strategy and oversees its implementation.
Al-Tayyar emphasized that comparing office leasing to retail leasing is not appropriate, as each sector has its own unique characteristics; however, office leasing requires greater patience, given that corporate decisions—especially those of multinational companies— go through several levels of management and internal approvals before being adopted, which makes the negotiation process longer and more complex.
The Importance of Studying the Nature of the Project and the Target Market
He emphasized that one of the biggest mistakes a leasing manager can make is viewing the space as mere numbers and square meters, without studying the nature of the project, the identity of the property, and the target market. Successful leasing begins with understanding the project’s strategy, studying the area, analyzing competitors, and identifying the types of brands or companies suitable for each location, because every project has a distinct character and a different target audience.
He explained that marketing office space differs radically from marketing retail stores within shopping centers, as the latter relies on attracting brands that target the end consumer, while office marketing relies more heavily on professional relationships, corporate databases, global and local real estate consulting firms, as well as brokers specializing in tenant representation.
Regarding the establishment of a new leasing department, Al-Tayyar emphasized that the right start is not limited to appointing a team, but begins with preparing a comprehensive study that clarifies the reason for establishing the department, its objectives, and its role within the company, followed by an analysis of the current and future real estate portfolio, the setting of financial and operational targets, and agreement with decision-makers on performance indicators, before establishing the appropriate implementation mechanisms.
He added that defining the identity of of the real estate asset must take place as early as the development and feasibility study phases, because the nature of the project and the level of finishes, services, and amenities determine the target customer segment and, consequently, the possible rent levels. There is a clear difference between a project located in a working-class neighborhood and one in a business district or a luxury development; each has its own target audience and strategy.
Pricing Strategies
Regarding pricing strategies, Al-Tayyar explained that most companies rely on a combination of market comparison and achieving the targeted return on investment, emphasizing that successful pricing does not depend solely on current market conditions but must also take into account future changes that may occur upon the project’s completion—whether in terms of competition, supply, or shifts in demand— therefore, pricing strategies must be flexible and dynamic.
He noted that the same principles apply to various types of real estate assets—whether offices, retail spaces, or mixed-use projects—despite the differing nature of each activity.
He also emphasized that demand for ready-to-use, fully equipped offices is growing rapidly in the Saudi market, particularly as companies seek to start operations quickly without incurring finishing and furnishing costs, which is why "plug-and-play" offices command higher rents—potentially 50 to 60% higher than traditional offices—noting that an increasing number of developers are turning to this type of product.
Policies on Incentives and Discounts
Al-Tayyar spoke about policies on incentives and discounts for tenants, emphasizing that the decision to reduce rent should not be arbitrary, but rather should be based on the tenant’s value to the project. An anchor tenant may deserve special incentives if their presence enhances the project’s value and attracts other tenants, whereas offering concessions may not be appropriate for tenants with limited influence or credit risks.
He discussed his experience leasing projects before their completion, emphasizing that the success of off-plan leasing depends first and foremost on the leasing manager’s ability to tell the project’s story and convince the client of its future vision, followed by the use of supporting tools such as 3D renderings, virtual tours, and presentations, in addition to a critically important factor: the developer’s reputation and track record of adhering to quality standards and delivery deadlines.
He explained that what concerns tenants most when signing contracts for projects under construction is the delivery date and the track record of the developer and the contractor, because many clients have had previous experiences with projects that were delayed, and therefore trust in the developer has become a key factor in the decision to invest or rent.
Al-Tayyar concluded his remarks by noting that the success of any real estate project does not depend solely on the quality of the building, but on the integration of planning, development, pricing, and leasing. He emphasized that a successful leasing manager views the property as an integrated economic system, not merely as a space to be leased, because the true value of a real estate asset is built through a clear strategy, a well-defined identity, and tenants capable of enhancing the project’s standing and ensuring the sustainability of its returns.
