All market commentary suggests that this year is going to be difficult for both tenants and landlords. The RICS commercial market survey for the third quarter of 2008, (available at www.rics.org) found that 'activity across all sectors of commercial property market fell further in England and Wales'. Occupier demand fell sharply whilst the supply of offices, industrial and retail space increased.
We have found that prospective tenants/purchasers are extremely cautious about making decisions on their property requirements. The uncertainty about the economy in 2009 is likely to mean that this guarded approach will be maintained. As a result those actively seeking commercial space are looking for value for money and to negotiate advantageous terms.
The effect of this uncertainty is that landlords and their agents will need to be proactive in the marketing of commercial space. Agents will need to provide a professional service, which will include suggesting innovative ways of promoting the space to make the property stand out above the others.
Owners should ensure that their properties are clean and tidy and that the asking rents/purchase prices are realistic. Lease terms should be flexible and inducements may need to be offered. These will need to be structured in such a way as to provide an incentive for the duration of the lease, not just at the beginning.
When there are fewer enquiries it is important to ensure that a strong relationship is established with prospective tenants as this often influences their decision. At Fisher German we emphasise the importance of personally accompanying interested parties on all viewings. This provides an opportunity to establish a strong rapport whilst at the same time enabling the vetting process to begin, which is also important in an uncertain economy.
2009 is set to be a challenging year but should be approached with optimism. With continued hard work, innovation and professionalism, Fisher German are well placed to guide our clients through the uncertain times.
For further information about commercial property issues, contact Simon Geary on 01565 757977 email simon.geary@fishergerman.co.uk
