1 minute read
Tough conditions in the property sector mean that shorter commercial leases are becoming more common, a new report claims.
A study from The British Property Federation (BPF), released in alliance with the Investment Property Databank, states that the trend reflects a general downturn across property and commercial lettings in the latter part of 2006/2007.
The change is also part of a "desire more generally across business for greater flexibility, with the average length of a lease falling from 6.2 to just 5.7 years", it added.
Taking break clauses in to account, retail leases saw the biggest drop, plummeting from an average of 7.8 years to 7.0 years.
Office leases dropped from 5.7 years to 5.2 years – while industrial leases remained the same as last year, at 4.2 years on average.
"Tighter market conditions experienced by the retail sector over the last year seem to be reinforcing the longer term trend across all sectors for shorter leases," Liz Peace, BPF chief executive, commented.
"Whatever the cause, in these uncertain times what is important is that the property market is offering a choice of duration of leases that reflects the needs of its customers. Of course, this downward trend cannot continue forever but I have no doubt that the practice of providing choice to potential tenants will continue and that is what is important."