Archive for December, 2014

Property Directors Forum calls for increased lease flexibility, improved landlord relationships and, signals increased focus on space utilisation for 2015

Thursday, December 11th, 2014
  • 88% of Directors believe more lease flexibility is essential to allow them to compete
  • 59% think FRS 12 is failing to encourage best behaviours for releasing surplus space.
  • 86% think landlord consent is still taking too long
  • Three quarters of Property Directors (76%) will be focusing on improving their space utilisation in 2015

Infographic:PDF_What's on the Agenda for 2015?London, December 11th, 2014 – Members of the Property Directors Forum are calling on landlords to deliver greater lease flexibility in 2015 to provide the right environment for growth. 88% of members felt this was essential and want to see improvement in the following areas: breaks/exits, term length, sub-letting and dilapidation/reinstatement. Another key area is landlord consent. These are still taking too long for 86% of occupiers. There is an increasing desire to change rent payments from quarterly to monthly. Members also want to see better communication with and by landlords so that more productive relationships can be developed.

Driving this focus on flexibility is the recognition that the recovery is not yet secured and that competition in the global economy means that businesses need to adapt quickly. Recent announcements by the Office of Budget Responsibility show that there is a need for continuing innovation in the property sector to make sure the recovery does not stall.

Because of the need for continuing innovation, the majority of Property Directors (76%) agreed that there is still room for improvement in space utilisation. A wide range of solutions are being explored such as alternative work styles, hub and spoking and moves like  Salvatore Ferragamo (Bond Street) and Nicole Farhi (Conduit Street) who have expanded into their office space above the retail element to avoid the extra rental.  Members also identified that FRS 12 is not having the desired effect in driving more effective utilisation. In fact, 59% believe that FRS 12 is failing to encourage best practice for releasing surplus space.

The predictions are the result of round table debates at the Forum event on November 13th and a survey of members. The Forum represents some of the UK’s most significant occupiers with combined revenues of over £500bn and is designed to provide a voice for Occupiers.

About Property Directors Forum
The Property Directors Forum (PDF) is an exclusive, invitation-only community that was created to provide Occupier Property Directors with a stronger VOICE in the market. The Forum now has over 90 active members of its LinkedIn Group and over 200 who have attended events. Forum members manage over 15,000 properties, employ more than 2million people in the UK and have a combined revenue total of over £500bn per annum. http://www.propertydirectorsforum.com/

 

 

 

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Avison Young UK predictions for the 2015 commercial property market

Wednesday, December 10th, 2014

Nick Cook, Avison Young Principal and Managing Director of the company’s U.K. operations, predicts the following:

  1. As a result of the recovering economy and the robust commercial property market, many landlords will leverage their position in the market by ignoring the need for continuing lease flexibility.  They will reduce lease incentives, increase rents and try to secure more landlord-favourable lease conditions.
  2. We predict that in 2015 there will be a very different approach from many occupiers. This will include the following:
    • Occupiers will review what staff must be London-based and look to move the others to cheaper locations
    • Alternative work styles will prevail but they will mature as it is clear that some ‘solutions’ such as remote working does not work for many organisations
    • Occupiers will adopt a more radical approach to space utilisation that will accelerate the move towards hub and spoking and other workstyle solutions.
  3. The acute lack of the right space whether it is for distribution / logistic companies, office users or industrialists means that the pre-let market will be even more active.  The need for occupiers to plan and ‘tool’ up with good advisors will be a must.
  4. The uncertainty caused by the General Election will slow down the commitment by occupiers to invest at the current rate.
  5. Foreign investors will continue to acquire London property despite the low yields since the sheer weight of cash will have to find a home and where better than the UK and key thriving centres.
  6. An increasingly aggressive attitude to asset management will develop as investors will demand the best returns and their advisors seek to add value in a market where the tenants hunting for good space will exceed supply!

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About Avison Young
Avison Young is the world’s fastest-growing commercial real estate services firm. Headquartered in Toronto, Canada, Avison Young is a collaborative, global firm owned and operated by its principals. Founded in 1978, the company comprises 1,700 real estate professionals in 62 offices, providing value-added, client-centric investment sales, leasing, advisory, management, financing and mortgage placement services to owners and occupiers of office, retail, industrial and multi-family properties.

www.avisonyoung.com

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