News

One of the remarkable outcomes of a recession and the incessant media coverage telling us all how gloomy we should be, is how gloomy it actually makes us.

On earlier occasions I have written about how collapsed shop chains in fact free up previously unavailable high street premises for the benefit of other entrepreneurial retailers which makes them the very opposite of gloomy.

Well the same is true of office and other commercial premises. There are opportunities right now for both landlords and tenants – opportunities that they should examine closely and act upon before it is too late.

For the tenant, now is the time to upgrade. Everyone wants to improve. The one-man band wants to move out of the spare bedroom to free up domestic space. The small partnership might want a parking space each and one for a visiting customer. They need to review if there is a better use of the square footage they are paying for.

Modest businesses may have workplace issues that result from increases in sales – extra rooms, extra storage, extra parking. Conversely, these factors can be the catalysts for improved business.

Every small business needs to examine the impact of undesirable premises and lack of space on credibility with customers, employee job satisfaction, productivity rates, quality recruitment and staff retention.

Part of any business plan should be to match the work environment with the needs of the business but the bald fact is that many don’t because they assume they can’t – the recession is on, isn’t it?

Well they could well be missing a trick. The recession means that there are some truly attractive commercial premises available and they come with some interesting incentives so now is a good time to lift your head from your PC and have a really good look around to assess if what you see is what you want or what your business needs.

Moreover, the cost of moving (the single biggest deterrent) can often be mitigated by the more efficient use of office space where, for instance, more cost-efficient utilities and related facilities are installed.

Landlords, too, can be guilty of recession related head in the sand syndrome. They should be examining very closely whether that they are wasting the potential of their valuable assets.

As tenants either go out of business, upgrade or downgrade their requirements, they are providing landlords with a rare opportunity to improve their stock with little hassle and in so doing begin the process of attracting better quality and longer term tenants.

Now is the opportunity of enhancing assets. Seize the moment to ensure you are DDA compliant going forward; ask yourself whether introducing three phase electricity, extra parking or a lift will make a property more marketable; use the time to introduce climate control, low solar gain windows, rain-water harvesting, energy efficient lighting, data links and wi-fi.

In short, waiting is not an option. Now is the time to anticipate future tenant needs and prepare for them. This is effective asset management and it’s not a cost, it’s an investment. It’s a sensible use of cash at the appropriate time and the cost is somewhat ameliorated by the fact that planning consents are undeniably softer in a recessionary environment.

If we can achieve a situation where tenants begin to understand the value to their business of upgrading their premises while landlords understand how asset enhancement will be of massive long term benefit to them and both understand that the cost-effective opportunities are available right now, the commercial property sector will have done its bit towards economic recovery and the return of market confidence.

Nick Wheeldon MRICS is director of Taylor Son & Creber