Do you have a break or expiry coming up in the next few months? With your staff currently working from home, you may wonder when the best time to find a new office is and more importantly when are you going to get the best price?
First off, office viewings are back up and running. You are now able to go out and view both flexible and leased spaces in person. Also, providers are changing their offices to keep you as safe as possible. You can read more about this here.
There has been a market-wide increase in flexibility, which is highly favourable to the tenant - so now might be a good time to reassess your real estate strategy with a fresh perspective and work out which workspace is most suited to rebuild your physical company culture.
As part of this increased flexibility, we’re seeing providers offer stepped and ramped deals where deep discounts are front-loaded and the monthly rate gradually increases over the 12/18/24 month term. This is a win/win scenario to both the tenant and provider - the client gets to take advantage of the lowest rate when they need it most and ease into paying a higher monthly fee and the provider can still achieve the average month to month rate they need to make a deal work.
Flexible start dates or the addition of a “corona clause”, which came as a response to the government's latest advice, allows the tenant to be flexible around moving dates and ensures you do not have space you cannot access if there is another lockdown.
Another incentive for the tenant is that some providers are allowing the deposit payment to be staggered and increases in rent-free periods.
In terms of price fluctuations, we always work to get the best possible rate for our clients. However, we’ve been able to get to the best prices quicker than usual with less of the back and forth in our negotiations. Providers are keen to get the deal done and fill their space, as vacant offices are feeling emptier than usual so this is impacting the negotiation process.
As for traditional leases, there's no doubt some room to push landlords. but the fundamentals remain that supply is limited and there is likely to be sustained demand for quality space in strong locations, such as the West End and City of London. That said, we are seeing an increasing amount of fitted-out sub-lease space coming to the market as some occupiers are under pressure to dispose of surplus space and are receptive to quick deals.
If you’re in a position to make a decision now or are looking for an office to move into in 2021, the next few months are a lucrative time to not only get a competitive rate but also negotiate an agreement that works for you. Drop us an email at firstname.lastname@example.org to kick-off your office search.