OPINION: COVID CREATING A TENANCY NIGHTMARE? KNOW YOUR OPTIONS
26th April 2021
For many business owners, Covid has been catastrophic, with some of the most commonly asked questions surrounding premises, leases and exit strategies. Here, our director Jason Hercock highlights how Covid doesn’t have to cause chaos and why it’s important to seek professional advice to understand your options…
“Contrary to many reports, Covid has actually created a lot of office market activity, especially in out-of-town business parks or semi-rural locations. As businesses start to re-open, it’ll be interesting to see how new working patterns emerge but what we’re already experiencing is business owners becoming less afraid to make a move, whether that’s to expand, relocate or downsize. But if you’re an existing tenant in a lease without the opportunity to break, what are your choices?
“One transaction I completed recently was for a home improvements company that was tied into a 6year+ lease on new, smaller premises. This move was made to safeguard the business as Covid hit, with the owners anticipating a recession, yet ironically the opposite occurred and home improvement retailers have seen significant growth. Worried they would not be able keep up with the increased demand, I secured them larger premises by completing an assignment of their existing lease and from here, the business has expanded. This is just one example of a successful conclusion and of course, there are many other factors to consider before entering negotiations, particularly local market activity and the wider economy. A solid understanding of these factors is far more likely to result in a mutually beneficial outcome for all parties, so do seek advice.
“Similarly for landlords, we recommend taking professional advice. With the workforce returning in as yet unknown volume, consider how your premises might best be utilised? Some of the larger office and industrial transactions we’ve managed recently are where landlords have subdivided larger spaces to utilise redundant space. Subletting could also be a viable option. If a space or a floor is only used for storage, can this be repurposed to generate another income stream which might be ideal for a freelancer or SME?
“My overarching message for both landlords and tenants here is that the current property market is both flexible and active. In seeking professional advice, you could not only save time, energy and money but also enable your business to thrive post-pandemic. If you’re unsure of your next move, have premises which could perform better, or are looking for a healthier return on your investment, then please get in touch.”