Reports about the death of the office have been greatly exaggerated, according to figures which show that demand for office space in the UK is higher than pre-pandemic levels.
In the first quarter of this year, the Royal Institution of Chartered Surveyors (RICS) reported a 30% swing in demand, with 69% of respondents reporting an increase in space allocation per desk last year.
The pattern is replicated in Europe where one office space specialist, Flexas reported a 300% spike in new office space inquiries has been registered across the continent.
Increasingly, businesses are locating outside London, resulting in increased demand for office space in cities such as Edinburgh, which saw record-breaking take-up of office space last year, and Manchester, which experienced a fourth consecutive annual increase in let office space.
“The general trend is that people want to open up shops, offices and cafes and get back to business,” says Robert Rosenberg, Commercial Property Partner at OGR Stock Denton.
“During the pandemic people said the office was dead and landlords in 2020 would have signed anyone up, but now rents have stabilised and the commercial property sector is buoyant. People want to get back to how things were before.”
3 considerations before signing a commercial lease
With a raft of businesses relocating and taking on new commercial leases, Mr Rosenberg gives his guidance on the top three considerations to make before signing a commercial lease.
- Get a clear agreement on how much you will pay during lease, in rent and service charges. It is always better to formally agree on a cap on the service charge so you can be confident it will not unexpectedly go above a certain rate. Many businesses get a nasty surprise when the landlord or property manager decides to hike up service charges mid-way through the agreement.
- Have a clear agreement on how you can get out of a lease. Generally, there are four ways; the lease ends, the tenant sells the lease, the tenant sublets or there’s a break clause. Make sure the conditions of any break clauses are understood and legally nailed down. We have dealt with numerous clients who needed help because they thought they met the break clause conditions, only to be held to term by the landlord because of some obscure condition they were not aware of.
- Have a lawyer draw up a contractual schedule of condition. Some landlords in this country think they are barons and lords and expect their tenants to leave a commercial property in better condition than when they moved in. You’d be surprised how many rent shoddy properties and demand they are pristine when the lease ends. I always advise people to have a schedule of condition which fully and accurately describes the condition of the property at the beginning of an agreement and agrees on what condition it gets handed back in. Without a schedule of conditions, a landlord can demand the place be handed back in better condition than when the tenant took the lease. Sadly, a lot of tenants come to me at the end of their agreements having been presented with a big bill. If you seek advice before you take the lease and get a schedule of condition in place you save this kind of pain.
If you’re planning to move to new commercial premises and want professional, no-nonsense advice, contact OGR Stock Denton’s commercial property experts today by email, or call us on 020 8349 0321.