What does Growthpoint’s UNdeposit option mean for clients?
Category News
Growthpoint Property is the leading property company in South Africa and - taking responsibility at the top - is exploring new ways to change the accepted status quo of how things are happening in the commercial property market in the country. They take great pains to understand how the economy affects their clients and competitors - and in response to the economic climate and what it’s been doing to property owners, tenants, and other stakeholders in the industry, Growthpoint has come up with an alternative strategy that will benefit their own business as well as that of their clients.
Introducing UNdeposit
In response to the havoc wreaked by the economic recession and the very sudden tightening of purse strings, especially in the commercial property arena, Growthpoint decided to make business a little easier for their clients. One area that always hits property tenants and lessees hard is the deposit required on a new lease or the renewal of an existing lease. Lease deposits have the power to strain cash-flow that should be used for operational costs. Growthpoint understands this, which is why they introduced UNdeposit - a solution that they believe will change the way in which the industry operates.
The benefits of UNdeposit
It is part of Growthpoint’s new objective to no longer ask clients for a large lease deposit up front when signing a lease with them. UNdeposit also applies to their existing client base wanting to renew their leases - they will be happy to know that there will be no large increase on their deposits. Growthpoint’s endeavour to operate as a business partner to their clients means that they are driving a win-win situation for everybody. For clients, this means freeing up that all-important capital so that they have the opportunity to grow their businesses. For Growthpoint, it means assuming all the risk, which is mitigated by a non-refundable fee paid by the client. The fee varies for each client and is based on their credit risk, as well as the duration of the lease agreement with Growthpoint.
How UNdeposit works
If a client’s deposit amounted to R100 000, the non-refundable deposit (based on the risk criteria) could be as low as R10 000. If the client invested that deposit amount and it grew at 6% interest, they would gain in the region of R19 000. This investment would recover the non-refundable fee and they’d receive a tax deduction.
This is just another forward-thinking idea from Growthpoint, with a little financial advice on the side. They have taken the time to learn from their clients’ experiences and to turn their business relationships into a journey that they walk with their clients.
Author: Ash Brook Commercial Properties
