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Client Success Story – Lease vs. Purchase Study for PT. Permodalan Nasional Madani (PNM)

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Introduction

PNM is a leading financial institution focused on adding value on an ongoing basis to micro, small, medium enterprises and cooperatives (MSMEs) based on the principles of Good Corporate Governance (GCG). 

For a long time, PNM was located in Menara Taspen, Jakarta. However, redevelopment plans necessitated PNM's relocation to a new building by the end of 2021. Colliers introduced its services to PNM and carried out a lease vs purchase study for them. 

Challenge

In assisting PNM with their plan to relocate to a new building, Colliers faced some challenges during the process, as follows:
• Tight timing to provide a comprehensive study that reflected the market
• Limited availability of an en-bloc building of the required size in the CBD area
• The approval process might take a long time due to internal bureaucracy

Strategy

The strategies that Colliers' Office Tenant Representation team prepared to meet the challenges were:
• Provide a comprehensive market study for both leasing and purchasing scenarios, and provide all available options for PNM, including for lease, en-bloc purchase (preferred), strata title purchase, up to lease with the option to purchase
• Prepare a detailed financial and non-financial comparison to make sure that PNM obtains the most efficient solution
• Colliers to negotiate the rent and selling prices of the shortlisted buildings and provide market data to landlords to justify the best possible pricing
• Advise PNM to exercise the lease option, purchase option or even lease with option to purchase within one year.

Result

Due to the timing and the approval process needed to purchase the building at the time, Colliers initially managed to secure a lease transaction with an option to purchase for their preferred building, with a very competitive rental package. 

During the fit-out period, PNM finally got approval to purchase the building. Therefore, we had to cancel the lease agreement and negotiate the purchase transaction. Colliers managed to get a good purchase price and conclude the transaction, including administration and legal processes, in a timely manner.

Click here to learn more about office relocation, renewal or lease restructuring, and including how you can accelerate your business success or contact our Office Tenant Representation experts for a discussion.


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