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„Independent verification is important in our negotiation process“

23.04.2020
Oxford Properties is the global real estate investment arm of OMERS, one of Canada's largest pension plans for public sector employees in Ontario. In 2017, Oxford announced the acquisition of the Sony Center in Berlin. Since 2019, Argentus has been working closely with Oxford Properties to restructure the property management contract for the Sony Center in Germany. When does it make sense to renegotiate contracts with service providers and what should be considered? We spoke with Abigail Shapiro, Head of Germany at Oxford Properties Group. Abigail Shapiro
Abigail Shapiro
Head of Germany at Oxford Properties Group
What was the reason you approached Argentus? We needed someone to help us renegotiate the existing property management contract we stepped into when we acquired the estate. The existing contract in place was not able to provide us with detailed KPIs, which we felt was important to ensure alignment of the interests of the asset manager and property manager. Why did you to decide to hire an external firm? We instructed Argentus because of the team's experience working on the property management side. Argentus was able to benchmark the market and identify key commercial points to focus the negotiations on and provide perspective of what would be acceptable to our property manager. Their independent verification was important for us in the negotiation process. So, how was Argentus able to help you? Our wish to renegotiate the contracts was focused on achieving a higher quality of management service for the Sony Center. With Argentus' support, we have now amended our contract to include key provisions to ensure our property managers are appropriately incentivised. What was important to you in the actual negotiations? We appreciated that the Argentus team had an entrepreneurial mindset and does not try to score points for one particular side. The team's professional background in leading asset services allowed them to put themselves into the shoes of our property manager as much as into our shoes to identify what will and won't work for both sides. Do you have plans to work with Argentus in other areas of your business? Yes, we have recently instructed Argentus to also support us in the review of our facility management contract.