Office space rental is about good decision making and balancing. Obviously you want office space that many people visit or go by on a daily basis, but there are downturns to that as well. With a commercial property that is used as space to rent quite often the building itself may not be in peak condition. So when looking at commercial property for lease you have to look at how busy a street is and how much commerce you get next to how dependable the building is. You certainly don’t want to end up spending a majority of your capital and profits on office repair.
Office space should be roomy. If you have to move in a copier, scanner and larger printer for example to do your work you may not have enough room depending upon how many other people you are working with. If you are a person that has trouble working in tight quarters make sure the office space you are being leased has plenty of room to move and walk around in.
Ball State University ranked the state of Missouri as the best state to own a commercial property in. This is due to the fact that the property tax rate in Missouri is comparatively low in the Show Me State. Missouri does level quite a luxury tax on the items that would be sold out of your office space for rent, but the buildings having caring owners. The owners care about their commercial properties in Missouri because the low tax rate reassures them that their investment very well could be successful. The city of St. Louis where you have passionate Cardinals baseball fans looking for things to do and companies like Scottrade who deal with a lot of wealthy investors would be an ideal place for a commercial property for rent given all that commerce.
It really does depend upon where your commercial property for lease is located and what the purpose of the office space for rent is as to whether it will be a successful venture or not. You’ve got a lot of building being rented out for office space during the political campaign season. The state of Minnesota has always had a high voter turnaround and a devout population of political junkies in the larger portions of the state in particular. So if you were to launch a statewide political campaign in Minnesota I would purpose finding several commercial properties for rent in the cities of Minneapolis and St. Paul for example.
If you are looking to involved in government and want to set up a lobbying for example, finding office space to rent in Washington D.C. is fairly easy for this purpose. Office space to rent in the District of Columbia is very expensive, but if you have enough clients to lobby for, you will welcome such an idea. Using your commercial property for office space purposes to a charity or other non-profit organization brings a lot of goodwill to whatever your cause is. Such moves would help with networking in large cities like Washington D.C. Also just because you are using your office space rental for a brief time now to set up a lobbying firm for example doesn’t mean the business won’t become more lucrative later and you might be able to buy the commercial property yourself.
According to figures in the latest report from a leading global property advisor, around 14 million square feet of office space in London is now lying unoccupied. This figure is at its highest since March 2007 and shows an increase in vacancies of 36.5% in the last 12 months alone. The commercial property market is directly tied in to the behaviour of the banking system; with banks like HBOS and the Royal Bank of Scotland now being controlled by the government, the likelihood is that even more unused office space will appear on the market as the Treasury implements its plans to streamline the systems of these major financial institutions.
As the banks seem to be setting the template for other businesses, the immediate future for the London office market from a Landlord’s point of view still looks bleak: many corporations are making redundancies and are either down-sizing on their premises, moving out of the capital or, in some of the more extreme cases, declaring themselves insolvent and shutting up shop entirely. For landlords of office space in London, this spells further bad news, but for tenants looking for office space this is fantastic news. With more and more office space in London coming onto the market and less being taken up, empty and unused premises are simply going to cost Landlord’s money that, in the present financial climate, they can ill afford to lose. Selling their properties is an unlikely option and, if they do so, it is likely to be at a considerable loss.
For tenants looking to rent office space in London, the news is far better. What was once a market firmly controlled by the landlords, is now a tenant’s market, with fantastic opportunities available across the board. In an attempt to court tenants, landlords are trying to ensure that their premises remain unused for as short a time as possible. This means that there has been a sharp drop in rents. According to Commercial Property News, London’s rental rates have already taken a cut of around 23% and the figure looks set to increase as the recession bites hard into the banking system and beyond. Coupled with low rents, landlords are also offering substantial rent-free periods. In the West End alone, incentives have tripled in length over the last 12 months.
This current economic situation is offering tenants the opportunity to relocate to more favourable London office space at a fraction of the costs that they would have been facing 6-12 months ago. With the decline in the strength of the pound, London is becoming increasingly popular with international businesses, as it no longer retains the title of the World’s Most Expensive Capital, but continues to offer some of the best business links and services across the globe. While these corporations are looking to exploit the downturn and move into top-end London office space for reduced rates, it also leaves the door open for smaller, home-grown businesses to take advantage of the stagnancy of the small and mid-scale markets. Whilst the credit crunch is spelling disaster for many institutions, prospective tenants are seeing a landscape of financial opportunity.
For interviews, quotes, images or comments contact:
Shivani Gurtu-Louth
Devono Operations Manager
Tel(DDI): +44 (0)20 7096 9911
E-mail: sg@devono.com
According to Reuters, the amount of office space in London lying empty has risen by ten percent since the beginning of 2009, meaning that the number of London offices that are immediately available to rent has risen to in excess of 10 million square feet. There are many advantages for a business looking to lease office space in London and there has never been a better time to find a real bargain.
The reason for this surplus of available London office space can be traced back to the beginnings of the current economic downturn. As banks and other major financial institutions saw the potential results of surfeit lending, they began to downscale and streamline their workforces. As it became no longer viable to have such small numbers of staff in such large spaces, they looked elsewhere for office property or have taken out short-term leases in favour of long-term contracts. In response, landlords decided to reduce the cost of office rental in London in a bid to prevent their properties from standing empty. Many even offered substantial deals in a bid to court custom, such as extended rent-free periods and capital contributions. The Investment Property Forum’s European Consensus Forecast has predicted that rents will continue to be driven down further, by as much as 26.6%. They also predict that there will not be much room for recovery until around 2011, when the beginnings of a recovery are expected.
While this is certainly bleak news for landlords and freeholders, the good news for business-owners is that the market for London office space has turned in favour of the tenant. Grade A office space (the industry’s term for the best of the best) has already fallen as low as £45.00 .0 per square foot, the lowest since 2004. These figures, paint a picture where business-owners will be able to undertake office rental in London for unprecedented prices, allowing them to take advantage of all the benefits of a London office space.
The Royal Institute of Chartered Surveyors has recently raised another factor that could force the prices of renting London office space down even further. It is their belief that the growth for office rental in London could fall to ’sub-inflation’ levels by the end of 2009. The reason behind this is that, with so many offices threatening to become unoccupied, there is also an excess of supply over demand. Once again, this looks set to work in the favour of the tenant. Add this to the fact that there are over 12 million square feet of office space being built in the capital and the future for landlords looks pretty grim.
To take advantage of the low prices and the prime locations, prospective tenants would be well advised to hire the services of a commercial property acquisition agent. Using their knowledge of the property market, they will have the best informed knowledge of the locations that are going to offer the best value for money and their negotiating power gives tenants the opportunity to push falling prices down even further.
While the recession may be spelling bad news for certain pockets of the London office rental market, it is offering opportunities for business-owners that, ultimately can only help to improve the state of the economy at a later date.
