A recent report by commercial property agents King Sturge (KS) may concentrate the minds of commercial landlords, who may be faced with a substantial reduction in income if they have to find new tenants in the event that existing ones terminate their leases.
KS has reported that commercial rents have fallen by 0.4 per cent in the last year and predicts that in 2009 rents will fall by a further 5.6 per cent, in 2010 by 4.7 per cent and in 2011 by 2.1 per cent. More worryingly, KS also predicts that there will be no upward movement in rents until 2013 and that landlords will have to resort to a variety of ‘sweeteners’ to obtain replacement tenants or to retain those they have.
In the present market, a landlord may feel that a bird in the hand (even one that is less than ideal) is worth two or more in the bush and it is to be expected that negotiations over rents and lease terms will become more difficult, particularly where the property being let is retail premises.
We can assist you in negotiating new leases and lease reviews.
Reported in Retail Week, 12 January 2009. See