Is it the right time to invest in or rent a Commercial Property?

by Vengardesh Sivapatham LLB (Hons), LLM, Solicitor

02 September 2022

The Commercial Property Market Survey conducted for the second quarter of this year by the Royal Institute of Charted Surveyors points to early signs of market downturn preceded by a post covid recovery. Occupier demand has started to fall with a similar trend being shown with co-variant indicators such as rent expectations, investment enquiries and capital value expectations. As expected, the opposite trend is shown with availability and inducements. General long term trends show offices and retail continue to generally decline in the long term, whilst long term industrial property trends in the opposite direction.

Purchasers and prospective tenants are holding onto their money due to increasing costs, rise in interest rates and inflation steered by the cost of energy. Industrial rent remains relatively strong backed by a longer-term demand for the e-commerce model of goods distribution continuing to encroach on the traditional retail 'high street' model. Older and dilapidated buildings are facing more difficulties especially due rocketing costs of building material.

For tenants, this means that there is a greater opportunity to negotiate lower rent and other favourable concessions.

Landlords must cautiously agree to any inducements. A balanced approach is required but at the same time they should not be short-changed by tenants looking to improve their own cash flow at their landlord's costs.

SIMO & Co Solicitors are experienced in dealing with all manner of commercial properties, both from the landlord's and tenant's perspectives. We can help clients minimize risks, provide options with a commercial focus, negotiate more favourable terms, protect your lease and business. If you need us to handle a transaction, dispute or need legal advice, call as to book an appointment.

The opinions expressed in this article should not be construed as legal or financial advice, and should not be relied upon. If you require legal or financial advice, you should seek the assistance from a professional.

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