These are uncertain times across the commercial property world. As we know, the impact of Covid has created upheaval in the office market with the working-from-home culture now either the norm or part of a hybrid situation, which has led to a reduction in the need for so much office space… and the knock-on effect this has had on the small retailers who also populate commercial centres and who rely on the office workers and commuters for their business, has been unfortunate. Commercial landlords are now unsure whether to convert unwanted office space to resi, sell their property on, or sit tight and see if people gradually return to their places of work on a more regular or permanent basis. Alongside this, our high streets are still in a state of flux with a lot of empty units as online shopping continues to grow, and the spectre of rocketing inflation and energy prices deterring consumer spending, even now, before we’ve even reached the winter months, is of major concern.
Did you know, the average office occupancy in the UK for the week ending 15 July stood at a mere 27.6%, according to data from Remit Consulting? That compares to an average occupancy of about 60% before the pandemic, and the figure has plateaued, hovering between 25%-30% for the past four weeks.
It is small wonder that all the above has seen pricing inevitably start to adjust and sellers of big-ticket assets are having to either accept price adjustments or pause disposals. For example, major London property deals that have been delayed include the £720m sale of Bank of America’s City of London HQ and the sale of the £3b Wembley Park BTR scheme has also been paused.
The world of residential property is suffering too. A survey by Propertymark a couple of weeks ago revealed the vast majority (80%) of responding estate agents confirmed rents are continuing to increase month-on-month and we know there are a lot of people out there whose finances are tight, and getting tighter, but who still need an affordable roof over their heads. These are people, gainfully employed, many of them key workers, for whom working from home isn’t an option and they need to be in or need urban centres. Without them our essential services – eg, the NHS, travel and transport, supermarkets and necessary retail and hospitality – wouldn’t run properly.
Obviously estate and letting agents want and need to let the properties on their books, and landlords need tenants, but if the people enquiring after some new resi accommodation can’t meet the rents being asked, it would be good to know that the agents might do a socially sympathetic deed and tell them about the options that property guardianship offers. It might not work for some, but it could be a lifeline for others. And the same goes for the vacant commercial property owners/managers. If they have no rent coming in, but still have outgoings to cover, installing property guardians in the empty building could be a great way to secure the property from trespassers and vandals and all the other problems vacant premises attract… and save them money in the process. Property guardianship is a win-win all round… so spread the word or pick up the phone to our offices and see how we can help.