ALWAYS READ YOUR LEASE
Your lease will stipulate a rent review clause, which would typically state to be reviewed at an agreed interval period ie 3 years or 5 years.
The rent agreed would typically be at market rent or linked to RPI.
Despite the perception that the majority of the UK workforce is operating on a hybrid work week and some businesses closing their offices to opt to be fully remote.
The OFFICES ARE NOT DEAD as there are several businesses that have decided to downsize their footprint but still require an office. And several businesses that can’t function without being in an office environment. These businesses are changing the way they function and demanding better quality space. Predominately with the main objective to retain and attract staff.
The notion of working from anywhere is changing people’s perception of what is acceptable. Therefore businesses have a hard task to make sure they create inspiring spaces that people want to work in. Of course, this is one segment of why people go to the office. Another is the people & culture.
For a landlord to provide better quality space, to support tenant business objectives – for example, an ESG requirement – businesses have to pay for it in rent. Given the lack of quality offices, some businesses are willing to pay a higher rate, to have a building that has the all “singing and all dancing” latest features. Therefore setting new market rents.
This market evidence is used to set rent reviews. Determining which market evidence is acceptable to support the new rent is by using the hierarchy of evidence that surveyors are obliged to use.
One good reason why it is important to be represented is that a surveyor will know which evidence can be used to negotiate a lesser rent for example.
We are all experiencing increased living costs.
With UK petrol prices hitting £1.99, rising 43.8% in the past year, food bills and energy prices increasing why are we so surprised that office rents haven’t increased?
Many businesses are focused on just the rent when it comes to negotiations. When actually there are a number of other items that can be negotiated to give a business favourable terms too.
We are representing businesses on both the landlord and tenant side (OF COURSE NOT AT THE SAME TIME) to advise what is market rent, based on market comparison and our knowledge.
Being represented to help negotiate the right deal can future-proof your business.
This is a simple introduction to one of the reasons your rent is increasing, I can’t give away all our secrets. So should you need help with your lease negotiations, please get in contact.
About Nella Pang
I left the corporate world in 2020 and launched Omega RE a commercial advisory firm in a pandemic, whilst on maternity. Brave some people would say. 🚀
The pandemic has taught many of us a thing or two, particularly on how we can do business. I support businesses to navigate the complexities of Commercial Real Estate, so they can achieve their business objectives through their Real Estate decisions.
Lease negotiations can be a minefield. Even small mistakes can drive up costs. That’s why I will represent your interests every step of the way, ensuring you receive the full value of our experience and market knowledge.
With over 18 years experience in the Commercial Property Market having worked for the big corporates Jones Lang LaSalle Limited, BNP Paribas Real Estate and Vail Williams.
I want to be able to share my corporate knowledge with my clients, whilst offering a more personal dedicated commercial advisory service.
Having acted for a wide range of clients from major pension funds to private investors, small businesses and individuals. I love meeting people and I am passionate about adding value to my clients’ businesses and watching them thrive.