It’s hard to believe but in just eight months we tick over into the second decade of the 21st century, *2010*.

What got me thinking about the near future was the varying terms on offer in property leases at the moment.

It’s not that long ago that leases for 10 years were the norm. These days we are most often talking about 3 to 6 years.

The property lease market today is incredibly fluid so the terms and conditions available to tenants are, I would say, little short of sensational.

I have recently gone on shopping expeditions for several clients whose rentals are up for renewal, to give them a clear comparison of what else is on offer.

There were a great number of attractive deals, with incentives built in to ensure the landlord could secure tenants. These often included incentives on top of rentals that were priced very competitively.

The rule of thumb is that landlords are more willing to offer better incentives if tenants sign for a longer term, around the 6 year mark. And as the deal is not so attractive to the landlord for a three year term, the incentives are usually less for the shorter term.

But in 25 years in the property business, I have not seen such fluidity in the market and such a wide range of opportunities. It is very hard to predict day to day where the market sits. But shopping around and working with professional backing to set up leases tailor-made to your needs is the order of the day.

And so while our current times are challenging for tenants and landlords alike, thinking ahead 18 months and further is a good strategy.

And it is also important to look at all the factors surrounding a property lease…

• The direction of your business and its brand and how that will look several years down the track, and whether your premises will still reflect that.
• The nature of the relationship you would like to have with your landlord in the future.
• Ever changing staff levels, and the need for flexibility in your space requirements.

These are just a few of the considerations. My advice is thinking beyond 2010, and don’t be afraid to consider a negotiation or a premises relocation to secure yourself a better deal as we hit the 2010s.

Tags: commercial property leasing, Lease Incentives, property, Property Leasing, recession property strategies, Rent Renewals, tenant & landlord negotiations

This entry was posted on Tuesday 14th April 2009 and is filed under Property Leasing. Both comments and pings are currently closed.