W1 Commercial rents..what downturn????

fc123

A quicky as I just don't 'get it'.

I read on here and elswhere how commercial values are down 40%, I surrender a lease and it's re-let at 25% less rent than we were on (doh..if they had reduced it for us we would have stayed) and I am at the cusp of making a decision on something.
This something needs some space.....at least 700 sq ft but I could fill 2000 easily.

Masses of empty office/studio space in W1 and I have googled 2007 rents.....all about £32 per sq ft. Now, they are a bargain price of......£30 per sq ft.

I have the same frustration now as FTBers. Come on.....at least go down to £22 per sq ft.

I have seen something edgy (read gritty/grotty) @ £4 per sq ft but it's not in the right place. It's on The River but wrong bit of river.
Just want to vent really...I mean...there's so much empty space....masses of it yet the LL won't reduce the rents.

Radiantsoul

Perhaps because reducing the rents might reduce the value of their assets? Or perhaps the owners have a lot of different plots and are happy for some to remain empty rather than cut prices to the level that more are filled.

A lot of landlords seem to offer things such as capital contributions for improvements and longer rent free periods instead.

fc123

Radiantsoul wrote: »

Perhaps because reducing the rents might reduce the value of their assets? Or perhaps the owners have a lot of different plots and are happy for some to remain empty rather than cut prices to the level that more are filled.

A lot of landlords seem to offer things such as capital contributions for improvements and longer rent free periods instead.

I know, it used to always be like that but I (maybe stupidly) thought that the new business rates rule would prompt LL to drop prices per sq ft too.

I may want more than I can afford.....but still riles me a little bit.
Off to view something on Friday @ £30 p sq ft...no long lease...just to see what deals are availble. It's going to be hard work too.:o

misskool

have you made them an offer? maybe they aren't dropping their advertised rates but willing to accept less.

fc123

misskool wrote: »

have you made them an offer? maybe they aren't dropping their advertised rates but willing to accept less.

In Real life I am a bit black and white in approach.
I cannot stand fannying around issues and playing 'the game' which is why the viewing is going to be so trying...I have to take time out to view something and faff around with the managing agent (who's on 5% on top just for 'being') trying to find out how low they will go. It's all soooo painful.

They offer a year rent free but want a 5 year lease....no way is that suitable for us.

I do have a get out as I used to rent from a charity in Spitalfileds who renovated and saved a lot of buildings years ago. They have very strict criteria on who can rent from them...and I qualify and am now on the waiting list. No business rates either but not the perfect area for us at the moment.

chucky

i've never been able to get my head around this - i see loads of empty space too

when a commercial property is a 'running business' returns for the landlord are usually very good.
maybe they are waiting for the good times again before they get a new tenant in

vivatifosi

West End is a funny old market and £30 psf is cheap (if you're talking true W/E and not fringes). £4 I've never heard of anywhere near that area, so I get that it's not in a prime area, but still £4? Would you not need change of use? £4 is cheap industrial rent, not office.

Your best bet fc is to find someone who has access to the commercial databases that are out there. I'm a bit out of the loop now (they are things I used to subscribe to), but if you want to pm me what you want I could try and put some feelers out.

lostinrates

chucky wrote: »

i've never been able to get my head around this - i see loads of empty space too

when a commercial property is a 'running business' returns for the landlord are usually very good.
maybe they are waiting for the good times again before they get a new tenant in

Reduce the rent on a shorter lease seems a good alternative...the businesses could take an increase in the good times...or can give way to those who will.

fc123

chucky wrote: »

i've never been able to get my head around this - i see loads of empty space too

when a commercial property is a 'running business' returns for the landlord are usually very good.
maybe they are waiting for the good times again before they get a new tenant in

My problem is I may have picked one of the areas of London that is owned by 'Old Money'? Soho is even more pricey @ £40 odd sq ft.

It's just an idea at the mo and I have 4 months to plan. I can't see it happening at those prices though..and I am being very cautious + MSE about it all too.:o

chucky

lostinrates wrote: »

Reduce the rent on a shorter lease seems a good alternative...the businesses could take an increase in the good times...or can give way to those who will.

i think it must be cheaper for them to stay closed wating for the right lease otherwise they would be taking on tenants.

the reason i don't know - i've never been close enough to the numbers and returns to have understood it enough

fc123

vivatifosi wrote: »

West End is a funny old market and £30 psf is cheap (if you're talking true W/E and not fringes). £4 I've never heard of anywhere near that area, so I get that it's not in a prime area, but still £4? Would you not need change of use? £4 is cheap industrial rent, not office.

Your best bet fc is to find someone who has access to the commercial databases that are out there. I'm a bit out of the loop now (they are things I used to subscribe to), but if you want to pm me what you want I could try and put some feelers out.

Does it sound cheap?...it's Noho 10 mins from Oxford Circus. Ground and a bit of upper.

The £4 one is a shed down on the river...near to london home too and a very secure shed too.....it's covered in solid metal shutters, all over it. Like a little 1200 sq ft fortress. I would probably have to shutter myself inside by day too.:o