Do you have a break or expiry coming up in the next few months? Are your staff currently working from home? Then you may be wondering when the best time to find a new office is and more importantly, when you are going to get the best price.
Office are open and ready to be viewed
First off, offices are open again and viewings are back up and running, so you are now able to go out and view both flexible and leased spaces in person. Also, providers are changing their spaces to keep you as safe as possible, so offices will be ready for you when you decide to go back. If you want to know more about the measures providers have put in place, you can read more about it here.
Increased flexibility in pricing and terms
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 for both the tenant and the office provider - you get to take advantage of the lowest rate when you need it most and ease into paying your rent 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. Some providers are happy to sign on an office today, with a future move date. Another incentive for the tenant is that some providers are allowing the deposit payment to be staggered and offering increases in rent-free periods.
Pricing in a tenant-friendly market
In terms of price fluctuations, we always work to get the best possible rate for our clients and recently, 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. Also, first movers are likely to see this reflected in a more favourable price.
Traditional leases remain tight, but there might be surplus space
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 the 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.