Midtown Businesses Surveyed By Irwin Mitchell Urged To Plan Ahead In Period Of Rising Rents

Location remains the most important factor for businesses choosing their premises, according to a snap shot survey undertaken by law firm Irwin Mitchell among the 100 strong audience that attended the Midtown Business Club seminar today.

Given that the total amount of available office space in Midtown is currently the lowest in Central London, (at 3.5%),  and rents are on the rise, the law firm joined up with property consultants Farebrother and the Midtown Business Club to advise on what tenants should consider, whether they are looking to move, extend, re-gear or renew their office space.

Although two thirds of those surveyed said they plan to stay in the same business premises in the next 12 months, 18% of businesses said they plan to relocate and 15% to take on more space. None planned to reduce their space requirement - an indication of the boost in the economy, in London in particular. And when asked what were the three most important factors in choosing their premises, 34% of those surveyed said location, followed by cost (24%)  and quality of building (14%). Interesting only 1% said energy efficiency, illustrating that despite new Government legislation, green issues have not really hit the agenda yet in most London occupiers’ minds.

The survey also asked the businesses their attitude to online working practices with 52% of those surveyed saying they thought this would mean businesses would need less office space in the future, and only 9% thought it would mean more, although interestingly none of the businesses had indicated that they personally were thinking of reducing space.

Irwin Mitchell also canvassed attitudes to landlords and whether they offered sufficient flexibility to occupiers.  A decisive 64% said landlords did not, with 36% saying they did, again an indication of perhaps a return to power for the landlord in tighter markets.

The situation is particularly difficult for the smaller occupier – there appear to be more opportunities for the top space but for those looking for good quality space under 5000 sq. ft., the market is very tight.

Indeed both Farebrother and Irwin Mitchell advised businesses either considering moving or staying in their premises to plan well in advance. With a large number of rent reviews coming up in this location, it is essential that businesses work out if their buildings are fit for purpose and plan early on how they negotiate with their landlords, rather than leaving it to the last minute.

Louise Cartwright, Real Estate Partner at Irwin Mitchell advised tenants to ensure that heads of terms for new leases cover all of a tenant’s requirements and contain sufficient flexibility for future business needs. She said:

Her Property Litigation colleague Sue Wilson continued: