Commercial Lease Negotiation Post Pandemic
When Covid forced non-essential retail and offices to close, commercial centres were changed overnight. People moved away from business and retail hubs into online shopping and home working.
Businesses have had to rapidly respond to this changing situation to keep operating. In this article we take a look at how the pandemic has influenced the use of commercial spaces, and consequently, what this means for commercial lease negotiation.
Offices:
Employers of office-based businesses soon discovered the potential for increased productivity through home working. Home working, or at least hybrid home and office working, is here to stay. However, it is not viable for many businesses to free themselves from office property liabilities altogether. In addition, many younger employees who do not have spacious suitable home working arrangements, and who need close supervision and support, wish to return to the office.
Businesses are having to experiment with different working practices allowing the mixture of home and office working. The need to protect the identity of businesses, social interaction and, where relevant, collaborative working, means the office remains at the heart of most businesses.
It is likely that to accommodate the hybrid approach to work, not to mention improvements to the employee experience to aid recruitment in such challenging times, changes to the layout of offices will be required. Any employers considering this should ensure that alterations are done in accordance with the terms of their leases, or that they have licence to alter commercial property. Unless minor and non-structural, it is likely that landlord’s consent is required and, to avoid potential breach and the works being rentalised at rent review, tenants need to proceed with caution.
With extensive experience in commercial lease negotiation, GA’s commercial property solicitors can advise on the relevant lease requirements and negotiate the necessary licence to alter commercial property with your landlord.
Industrial space/warehouses:
Another impact of the pandemic is a huge growth in the warehousing sector due to online purchases and deliveries. This has resulted in the demand for warehouse space outstripping supply in some areas, leaving tenants struggling to push forward a commercial lease negotiation against higher rents and inflexible terms.
Retail:
It is a little different with retail. Office closures have impacted footfall leaving landlords finding it difficult to fill their vacant retail space. This has resulted in landlords accepting more tenant-friendly terms, including greater flexibility with break clauses and turnover based rent reviews.
Our talented team of commercial property solicitors is experienced in acting for both landlords and tenants of retail and industrial premises and can provide expert advice with commercial lease negotiation.
You can contact me directly by emailing David.stone@GAsolicitors.com or calling 01752 203500.