With the summer rent quarter coming up, businesses which have had little or no income for the past ten weeks are wondering how they are going to survive the rest of this year.
When we held the public meeting to launch the Flower Market in February, Jeremy Day, Commercial Director of local estate agents Whitman and Co, and Ollie Saunders, Head of UK Valuation & Alternatives at the huge American commercial real estate services company JLL, promised to set up a Landlords and Tenants Group to help small businesses and their landlords negotiate. While Jeremy represents both landlords and tenants locally, Ollie is independent and both have many years of experience in this area.
Here’s Jeremy’s guest blog. Get in touch if you are interested in joining the Zoom chat on Thursday 11 June at 5.00pm.
By Jeremy Day
In September I will have been working as a Chartered Surveyor in the commercial property market for 30 years. With the possible exception of the early 1990s, when there was a significant property crash following the late 80’s boom, I do not think I have seen a more challenging period for real estate than now. The dotcom crash and the 2008 financial crisis brought their challenges, and resulted in price corrections, but what we are seeing now is re-writing some of the fundamentals of real estate.
Who could have predicted the total closure of shops, that offices need to incorporate social distancing, that just-in-time delivery from around the world cannot be assured? In retail, leisure and hospitality, business rates have been cancelled completely for 12 months. (This will surely hasten the long overdue review of the entire business rates system.) One of the firms I work with sits on the 31st floor of a Canary Wharf office building and estimates it will take two hours for staff to get into and out of the building! These truly are extraordinary times.
Closer to home in Chiswick, the very positive level of enquiries in January and February naturally dried up for the early weeks of lockdown, as people concentrated on understanding this monumental development, on personal and business survival, on their own families and their health, etc.
Notwithstanding the unprecedented levels of support from the Government, many businesses are hugely threatened by their short-term exposure to fixed overheads, including property costs, and are balancing these with protecting cash in their business. We have been helping many parties, both landlords and tenants, to navigate negotiations around rental liability, lease terms, etc. We want to all we can to keep premises, particularly shops, occupied – and help business to trade successfully.
The Government have taken steps to prevent landlords from repossessing and from legal proceedings, but a lease is a binding contract, and it is only through negotiation, having regard to the particular circumstances, that lease commitments can be varied. The property market is a very wide market, with a wide range of landlords, from private individuals for whom a property investment is their pension pot, to the major pension funds themselves. Equally, tenants range from ambitious private independents, to major corporates. Everyone’s circumstances are different. For this reason it is so important to take professional advice, from a Solicitor or a Chartered Surveyor, to ensure that you take the right steps given your own circumstances.
Following the Town Hall Meeting organised by The Chiswick Calendar and others in February we are inviting anyone who is interested or effected by real estate challenges to the first meeting of the Chiswick Landlords and Tenants Group, which will take place as a Zoom conference next Thursday evening at 5.00 pm.
Here, while we will not be able to deal with individual situations, we will offer some pointers to help to navigate the possibly difficult negotiations between landlords and tenants in these unusual times.
To end on a higher note, it has been fantastic to see the innovative way that many local occupiers have responded and transformed their businesses to cope with the ‘new normal’. From promotion on social media, through increasing online sales, transformation to take-away products, etc. The adaptability and enterprise of local business has been impressive.
There are also some encouraging signs of green shoots. In the last week we have let a small office in central Chiswick, placed three separate properties under offer, and have terms being negotiated on several others. The level of enquiries has picked back up, which suggests that the property market places quite a positive view on Chiswick, and its ability to respond resiliently. There is a strongly held view that people will travel less far and support more local businesses. The call now is to respond positively to this opportunity!
Jeremy Day FRICS
Tel: 07966 810030
Read More Stories on The Chiswick Calendar
See also: Flower Market planned for 6 September