Fill 289 desks at Rosebank in thirteen months. Everything in the commercial plan is subordinate to that.

11.1 The commercial objective, stated precisely

Table 31 Occupancy milestones by centre

Source: Company financial model. The ramp assumes 5.5 percentage points of occupancy per month from a 20% opening base.

Expressed as a sales task, the Rosebank ramp requires the Company to sign approximately one and a half private-suite contracts and a handful of smaller agreements each month for thirteen months. That is a modest absolute number and it is the reason the plan is credible. It is also unforgiving: two consecutive months without a suite signature puts the ramp a month behind and, compounded across a year, moves stabilisation from month 13 to month 18 and reduces the equity IRR by roughly seven points.

11.2 Sales funnel

Table 32 Sales funnel and conversion assumptions, Rosebank ramp year

The pre-launch campaign is designed to deliver 58 signed desks, 20% of Rosebank capacity, before the doors open. This is achievable only if the campaign begins at the end of month 1, three months ahead of opening, and if the Company can show prospective members a completed show suite by month 3. The show suite is therefore a critical-path item in the implementation roadmap, not a marketing nicety.

11.3 Channel strategy

Table 33 Channels, economics and the segments they serve

11.4 Pricing strategy

• Published rate card, disciplined discounting. Rates are published and the Company will not discount headline rates. Where commercial concession is required it is given as a rent-free month or a waived deposit, which preserves the rate card, is easier to withdraw, and does not reset the renewal base.
• Escalation contracted at 6.5%, below the 7.5% lease escalation. This deliberately concedes one point of spread a year in exchange for renewal probability. Across the portfolio it costs approximately R2.3m of cumulative EBITDA over five years.
• Term-based pricing. A 24-month contract is priced 4% below a 12-month contract, and a 36-month contract 7% below. The discount is cheaper than the churn it avoids.
• Positioning at approximately 88% of global-brand rates. This is the core price position and it is defended by matching the service specification rather than by discounting further.
• Ancillary priced on consumption, not bundled. Meeting rooms, parking and additional services are charged separately. Bundling would raise the headline rate above the competitive band and obscure the consumption behaviour the Company needs to manage capacity.

11.5 Retention

At a 25% weighted average annual churn rate, the Company must resell approximately 189 desks a year at build-out simply to hold occupancy flat. Retention is therefore not a secondary activity; it is roughly a third of the commercial workload and considerably cheaper than acquisition. The renewal process begins ninety days before contract expiry with a service review, a utilisation analysis and a rate proposal. Accounts above fifteen desks receive a quarterly review against their own utilisation data, which is the single most effective retention intervention available to an operator because it converts a price conversation into a capacity conversation.

Table 34 Retention programme and expected effect

Source: Company commercial plan. Effects are estimates drawn from operator experience in comparable markets; the financial model does not separately credit them, so achieving them represents upside to the base case.