According to research conducted by Jones Lang LaSalle, tenants of office properties are becoming more and more demanding, in terms of rent rates and leases. But why has the power moved away from landlord’s, into the tenants hands?
According to the research many tenants feel that the tables have turned and that they have more power over landlords, with the economy in its current state. Tenants are well aware that many landlords may struggle to fill office space as more and more businesses seek ways of cutting costs, often meaning downsizing or downscaling their commercial property. Consequently, this leaves high quality and expensive office space available, often costing landlords hundreds of pounds, when not in use.
Speaking of the results, Jeff Pearey, Office Agency Director at Jones Lang LaSalle, Leeds office, stated: “York and North Yorkshire office occupiers recognise that the economic climate means that they are in a stronger negotiating position than ever before and are revisiting their property strategies to ensure their workplace is working harder for their overall business.”
“This shift in the traditional balance of power between landlord and tenants will affect York and North Yorkshire’s property landscape, generating greater collaboration between landlords and occupiers,” Mr Pearey added.
So what power do office tenants have?
The findings from Jones Lang LaSalle indicate that office tenants have more and more influence over how a commercial property is built, therefore tailoring it to meet their business needs. This enables the tenant to build a partnership with the developer, ensuring that they get the building to exactly how they want it. Tenants are also becoming more confident and are willing to enter negotiations about lease lengths with their landlord, to get the best deal.
Many landlords are now offering more and more incentives to entice people into renting their offices. Recently Bruntwood offered rent-free offices in Liverpool to attract business start-ups, as Colin Forshaw, Head of Sales at Bruntwood, stated: “By offering office space free of rent, Bruntwood is able to give businesses some respite from the initial overheads or expensive start-up costs, helping them concentrate on running their business.”
If you are a tenant looking for a commercial property or office space, then have a look at our Tenant’s Guide, which offers advice on finding a property, licences, Energy Performance Certificates (EPC), business rates, just to list a few.
