Lease Renewal
If your lease has already expired or is nearing its expiry date, it might well be time for you to be pro-active with your Landlord before it is too late.
Some sectors of the UK commercial property market such as high street retail and leisure have been impacted very severely by the pandemic, as we all know. However, the picture is mixed and amazingly, the rents on some commercial properties have been rising quite quickly. For example, Manchester’s office rents have risen steadily over the last 2 years. In the logistics sector, there has been what can only be described as explosive rental growth due to demand from on-line retailers outstripping the available supply of warehouse space.
It is therefore important to consider the timing of your lease renewal particularly if there is a risk that your landlord wishes to crystallise recent rental growth before an economic downturn takes effect.
In some cases, it might make sense to agree a short term lease extension rather than risk a formal renewal process which might result in a far longer lease being awarded.
Weighing up your options
We can help you decide whether or not to apply for a new lease under the provisions of the 1954 Landlord and Tenant Act by serving a Section 26 Notice Requesting a New Tenancy. Alternatively, it might be better to initiate negotiations with the Landlord before serving your notice. Whichever option is appropriate, we will ensure that you secure the most advantageous lease renewal terms possible.
What are the benefits of being pro-active?
Taking action in the current market will ensure continuity of your occupation on your terms. It could also result in a reduction in your property costs in the short term. It should also ensure that your new lease is more flexible and less onerous than the original. There might even be opportunities to surrender unwanted space or to acquire additional space within the same building or estate. In some cases, an early lease renewal may encourage the landlord to carry out improvements to common parts and/or your own demise.
What happens if I do nothing?
There is a risk that if you do nothing you will miss the opportunity to minimise your property costs and improve the flexibility of your lease. This could have a negative impact on your business by reducing its profitability and limiting its mobility in the future.
What does TAG recommend?
We recommend that if you are considering renewing your lease, you ask us to review your options as soon as possible. This can be done on a free, no obligation basis.
