We’re often asked how we actually calculate our rental rates. First of all: we don’t calculate rates individually for each listing; instead, we offer a price list that’s the same for everyone.
Nevertheless, we must, of course, regularly assess whether we are still meeting our own standards and those of our shareholders. After all, our rents should be fair and transparent, and should not put companies that are not tenants of TFU at a disadvantage.
We do not offer subsidies; rather, we compensate for the disadvantages that arise from the startup phase.
To ensure fairness, a neutral and transparent index makes sense. But which one? The inflation trends frequently cited in private rental agreements do not adequately reflect the situation for commercial rents. Furthermore, indices that cover large regions—such as entire federal states or metropolitan areas—are not precise enough to determine a rent that is appropriate for Ulm and Neu-Ulm.
Fortunately, there is a local index: the Commercial Rent Index published by the Ulm/Neu-Ulm Urban Development Association. It provides a good overview of the lowest and highest rents, as well as the range of average rents for office space in Ulm and Neu-Ulm.
Therefore, we have decided—and obtained approval from the shareholders—that in the future, for start-ups up to 5 years old, we will use the unweighted average of the lowest and highest average values (the “average of the average” mentioned above). The lease agreements will be amended accordingly. This procedure was approved by the TFU shareholders on May 10, 2013.
We have deliberately chosen not to include the extreme values of the index. In our opinion, adjustments—whether upward or downward—are also not suitable for ensuring the necessary transparency.
The situation is slightly different for older companies. In these cases, we use the higher average value.
Pricing is thus kept as simple as possible and is transparent, based on publicly available information.
To be honest, we have to admit: since we still do not charge for common areas and continue to cover the costs of internet access, reception services, the phone system, kitchenettes, meeting rooms, and consulting services through a flat fee, TFU is and remains an affordable option. But we’re not cheap, and we never wanted to be. However, we want our pricing to be transparent. We believe this step has brought us a step closer to that goal.
