As economic times toughen, business leaders with an eye to the future need to watch trends even more intensely.

In the property leasing market, we need to frequently look a few years out in decision making processes. Buildings currently under construction that will open for business in the next few months were conceived and leased 2-3 years ago, when the world economy was booming.

So the million dollar question becomes, what is the market going to be like in a few years?

Much as I’d love to have a crystal ball, I don’t. But what I can say is that there will be ripples of aftershocks from the economic downturn for some years to come.

Senior bankers I’ve been speaking to say there are businesses already struggling, but negative impacts across some sectors may not show up for several months, even years.

While conditions are not exactly the same, we can reflect on the trends during the 1987 crash. At that time I was responsible for a nationwide commercial property portfolio and we saw a number of businesses in strife even 4 or 5 years later, and their struggles impacted heavily on the supply and demand for commercial property.

Some trends in employment could be beginning to shift too, and while businesses a year ago believed getting more quality staff was the main barrier to growth, there are signs employers have managed to deal with it, and as the economy tightens, they are starting to not replace people leaving positions.

In essence, what this all boils down to is the need to seriously think through property options, and how your commercial property lease portfolio can be managed to benefit your bottom line. There are so many factors at play, and I find clients increasingly need to consider independent support across all the trends that are going to impact their property lease decisions.

This entry was posted on Monday 23rd June 2008 and is filed under Property Leasing. Both comments and pings are currently closed.