Most commercial property leases are for three of five years if you take four as the average then a quarter of the tenants reading this will have the option to move this year. Stephen Chown takes a look at their options and considers how they can best place themselves for the benefit of their businesses over the next 3 to 5 years.
In fact it is likely that more than a quarter of tenants reading this will have the option to move this year because many will have held over at the end of their lease as it ran out in the last 12 to 18 months. Ironically if their rent was set three or four years ago it is likely that these tenants are paying considerably more than the current open market rent the same accommodation. More ironically, as time goes on, if the same tenants are in traditional Victorian buildings, their office accommodation is getting more and more out of date at the same time as it is becoming more expensive!
Theres only one thing to do: move! At the present time there is a wide range of modern office accommodation available around the town and much of it will be at considerably lower rents than tenants are currently paying. Furthermore there will be the opportunity to trade existing cellular Victorian office accommodation with wi–fi unfriendly walls and surface mounted lighting for modern flexible floor-space much of it with perimeter trunking, raised access floors and suspended ceilings with modern lighting meeting more up-to-date specifications . Maybe even air-con!
For those reading this column and considering downsizing, now is also the right time to undertake this exercise as small business rates relief has been extended to include properties with rateable values between below £12,000 and for those properties below £6000 zero rates are payable for the forthcoming year! This creates an instant saving of around £2500 which will substantially help a small business relocate their operation.
Advice from the CBI suggests that the depressed economic trading conditions are likely to continue for 3 to 5 years and from a tenants perspective there is an advantage to gritting your teeth and setting your business on the best possible course for this period: there is an obvious advantage to trading from the best property to give yourself the best possible chance of success during this period. Gone are the days when renting more space cost more money: gone are the days when tenants said they couldn't afford to move!