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01/12/2008
Adam Landau, Director of Devono Property, gives you top tips on getting the right business premises.
With the credit crunch underway, should I look to be downscaling my offices, think about moving or try to renegotiate my office lease under the current market rental rates?
Adam Landau replies:
2009 will be the best year to move office since the end of the late twentieth century. Companies that choose to move office late next year when the market reaches its lowest point will be able to secure rental deals on terms not seen in the past decade. This will be an opportunity to make significant savings in the short and long term. At the market height a year ago, it was not uncommon for companies looking for new office space to pay more than £100 per sq ft on average, even up to £140 per sq ft in, for example, London's Mayfair - the highest ever recorded rent in commercial property history anywhere in the world.
Under the current and forecast market conditions, no company should be paying more than £100 per sq ft for grade A office space even in Mayfair and St James's. An oversupply of office property space in central London, in fact, in all major UK city centres, makes this a tenant's market where landlords previously held power, so prospective tenants should capitalise on this by moving during 2009. Every tenant should consider this opportunity, not just those whose leases are up for renewal in the next year or so.
Many with longer time left will find that by breaking their leases earlier and taking a new office space at a much lower monthly cost, they can, in many instances, save significantly in the long term by moving, even including the cost of breaking a lease, financing an office move and their interior design and build.