Commercial Rental

Commercial Property to Let Southampton

There are many reasons to consider Commercial Property to Let Southampton – a good long term commercial property investment location.   Southampton is a key maritime port handling 1/5 of the UK’s container traffic with DP World Southampton being the 2nd largest container terminal in the UK.  Southampton supports 77,000 jobs in maritime industries and income of over £5.5 billion.   It is has always been a key cruise liner base but this is due to rise to 1.49 million passengers by 2020 and 2 million by 2030.   The port handles in excess of 42 million tones of cargo annually and by 2030 this is due to rise to 62.6 million according to the calculations of Associated British Ports which operates the Southampton port.  it handles 7% of the entire UK’s entire seaborne trade. Read the rest of this entry »

Retail Property to Rent

It doesn’t take a property genius to work out the high street is currently in decline but the out of town retail sheds are also taking a battering in the current tough economic climate with big retailers like Halfords and Carpetright giving severe profit warnings, so what is the outlook for potential retailers before committing to a retail property to rent?

Who will fill these A1 (the use class for high street retail)spaces?   There seems to be little shortage of A3 (restaurant and pubs) and A4 (hot food takeaway) with outlets like Subway often opening 4 -5 outlets in one medium sized city alone.   Starbucks has had to reinvent itself from the top downwards in order to stay ahead of the countless designer coffee outlets and Costa Coffee is snapping on its heels.  Have coffee houses reached saturation or is there still potential for high street low cost retail property to rent? Read the rest of this entry »

Rent Review

rent reviewWhen you take a commercial lease, one of the most intimidating parts of a lease are the rent review provisions.  They go on for pages and are full of jargon.  I wanted to give you a brief guide to rent review provisions so that when you are given a copy of a lease, you will know exactly what to look for.

The rent review provisions in a lease of commercial property are usually found in one of the schedules at the back of the lease.  At the front of the lease, there will usually be set out the rent review dates.  Most commercial leases have a 5 yearly rent review pattern although some have a 3 yearly pattern.  Reviews every 3 years can be costly for both landlord and tenant who have to employ surveyors each time there is a rent review to argue their position. Read the rest of this entry »

Commercial Rental Property

Commercial Rental PropertyIn large cities if a business needs to take space it will invariably be a lease which is available which brings me onto commercial rental property.  It is rare for freeholds to be available at affordable prices.   It is the preserve of investors, wealthy landowners and financial institutions looking for secure rental income.   Most businesses will be looking at commercial rental property.   So what are the disadvantages of rental property as opposed to freehold properties?

Commercial Rental properties are granted for varying terms.  25 year leases used to be the norm.  This was the length of a so-called “institutional lease” ie. A lease which would be suitable as an investment vehicle for a financial institution.  However, the length has been steadily decreasing and the recent credit crunch has given potential tenants the bargaining strength and brought rental terms crashing down.

Most tenants are now looking for no more than a 5 to 10 year commitment and sometimes they want shorter break options within that term.   In strict terms a lease should only be regarded as the length to the earliest break option.  So if a 10 year lease contains a tenant’s break option at year 3, then this should be regarded as a 3 year lease.  The tenant may not exercise his break but you cannot rely on more than 3 years rental income as a landlord.   There is a glut of office premises in most cities especially the secondary properties ie. Not new built offices but existing offices.   Landlords are open to negotiation.

So what terms should a tenant be seeking in the current climate? Read the rest of this entry »

Dominic Beeton, Solicitor
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