The post-pandemic world offers tenants an array of possibilities when sourcing new office space or negotiating more advantageous terms for their existing space. Here are five key takeaway opportunities:
The commercial real estate market is still finding its feet and coming to terms with a radically altered playing field in 2022. Many businesses are adopting work from home or hybridised models resulting in a sharp decline in demand for office space. However, the amount of inventory on the market has remained the same or increased as new developments have come online. The result is a 'buyers market' in which your business can secure favourable terms across leased, serviced, or managed spaces.
Current real estate market conditions afford your business more choices than in recent years. Office tenants now have a range of occupancy options, offering different contract lengths, property types and rental and capital-expenditure costs, to cater for their varied business needs in the short, medium and long term.
You may have reassessed your business's ongoing office needs and decided that flexibility is a priority. You might need a short-term stop-gap or the ability to scale up or down over the next 6-12 months as you stabilise cash flow or deal with the fluctuations associated with growth. Managed offices allow you to replicate the traditional leasing model but on very flexible lease terms and with lower initial capital outlays, meaning you can still engineer an ideal workplace for your business.
Tenant retention is a priority for commercial landlords following the pandemic-induced mass office exodus. This fundamental shift in how we work and view the office is here to stay and presents an immediate opportunity for your business. An upcoming lease expiry or break option event should be viewed as an opportunity to effectively leverage and negotiate more agreeable lease terms.
Upcoming or overdue rent reviews in the present climate may well result in a nil rent increase, given market conditions. Aside from addressing the underlying cost of your office rental, a rent review is a great time to voice any concerns with your landlord. Working with a professional property consultant will allow you to formulate the best strategy to achieve a nil rent increase and obtain certainty over future rental costs.
Nothing stays the same forever, so we expect to post an updated version of this over the coming months. But for now, we hope you seriously consider taking full advantage by leveraging the present climate to your business's advantage and competitive edge.