SME Occupiers look to shorter term leases
This week’s Property Week reports that small and
medium sized enterprises (SME’s) are increasingly looking for shorter leases,
prompted by fears that the Government will not be able to secure a good deal
for the UK in Brexit negotiations.
According to the Citibase Confidence Index, just
35% of SME’s were confident the Government would secure a good deal. At the same time, lease lengths of 1-3 years
have become increasingly popular, with 41% now favouring a short lease, up from
30% in just 6 months.
This report is in no way a surprise to Newton
Perkins where we have witnessed a steady increase in occupier demand for
flexible leases and this is no doubt backed up by the alarming amounts of
commercial space being taken up by serviced office companies within the City of
London and throughout Central London.
According to the Estates Gazette serviced office take-up was around
c.30% of Q2 take-up within Central London.
The flexibility that serviced offices provide in
the current uncertain economic climate combined with the engaging amenities
such as large break-out areas, meeting rooms, function room facilities and
relaxation rooms are reasons for such large take-up.
The emergence of the serviced office market is exemplified
by Blackstone’s majority stake in flexible workspace provider The Office Group
and the fact that traditional landlords such as British Land are looking to
capitalise on the rapid expansion by starting their own serviced office brands.
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