The latest ICAEW UK Confidence Monitor (Institute of Chartered Accountants) has revealed that business confidence in Wales has moved into positive territory for the first time in more than a year.
Whilst the results are encouraging, it is also clear that, in the current economic climate, companies remain focused on maintaining cost-efficiencies. At the same time, landlords will also seek to keep costs in check.
“It is good news that businesses are looking at expansion and seeking premises able to support their growth plans,” says Lee Mogridge, Head of Lambert Smith Hampton (LSH) in Wales.
“However, finding a suitable space is just one step. There are potential pitfalls surrounding the exit of the current property and securing the right terms for the new premises, which is why taking professional advice is critical.”
From a landlord’s point of view, providing attractive space for companies can also be a challenge, says Lee: “Landlords cannot command a premium for poor quality space but equally, they are often unwilling to invest unless returns can be assured.
“This is why we focus our services on creating conditions where both landlords and occupiers can be confident about their long-term prospects.”
Here we set out three key areas where getting the right advice pays dividends.
1.Exiting your existing property on the right terms
A company may be ready to move in to a larger, better located space but when their lease ends, they are responsible for the condition of the property they have occupied.
This area is known as dilapidations and there is often a need for negotiating what the occupier will repair, redecorate or reinstate.
“It can be a complex process but we manage over 2,000 dilapidations claims each year and we draw on best practice to ensure a smooth exit at lease expiry,” says Simon Thorpe, Director of Building Consultancy at LSH Wales.
Where can tenant savings be made?
- Agree a schedule of repair at reasonable cost
- Negotiate a settlement
- Oversee bringing the property up to standard within an agreed budget
- Raise funds to cover costs covered if required
2.Securing the right space
It is no secret that there is a significant shortage of Grade A space in Wales.
“It is a source of frustration for businesses hoping to relocate to modern, attractive and well-serviced space,” says Steve Matheson, Head of Office Agency, “but we are helping companies upgrade what is available.
“We also work with landlords on regeneration as without it, it is proving difficult to secure long-term, quality tenants.”
Where can landlord savings be made?
- Negotiating and agreeing areas for upgrade
- Preparing a schedule of works
- Preparing tender and contract documentation
- Supervising the works
- Providing cost consultancy
- Agreeing final accounts
- Structuring a lease
3.Managing the space
Beyond statutory requirements, businesses leasing a building expect any maintenance issues to be addressed by the landlord in a timely fashion.
As Jon Latham, Associate Director of Property Management at LSH comments, “All buildings face issues and they have to be reported and acted on quickly in order to protect the day-to-day ability of a company to function and ensure that the fabric of a building does not suffer unnecessary and potentially costly damage.”
Where can landlord savings be made?
- Statutory annual Health & Safety Risk Assessments
- Audited service charge accounts
- Centralised reporting and tracking
- A 24/7 Helpdesk Service through eLogbooks
- Ongoing management of maintenance issues
By combining local knowledge and national expertise, landlords and tenants can control costs and accommodate their plans for growth.