Finding a Business Premises
Rises in house values may still hit headlines but it is not just domestic property owners that have enjoyed prosperous times. In those parts of the UK with a reasonable amount of wealth and no major economic catastrophes, it has also been a commercial landlord and property sellers' market.
Developers, having had their fingers burnt when the property market crashed 10 years ago, have been cautious about building new business space. While this may minimise the effect of any future cooling of the economy by reducing the risk of having empty buildings in a downturn, it does not bode well for business space occupiers. Rental growth while steady in some areas has been exceptional in others due to lack of supply of space.
London's West End, according to figures published by surveyors Healey & Baker, is now one of the most expensive cities in the world to have an office.
Edinburgh too has witnessed rental records with levels on a par with the M4 corridor where hi tech giants such as Oracle and Microsoft choose to locate.
The FTSE-listed companies may be the ones paying the headline rents on grade A space but rises often filter through to the second-hand and smaller space market.
Leasing remains the most common practice probably because it offers more flexibility but the length of leases is changing.
Institutional leases of 15, 20 and even 25 years are common but there are increasingly shorter leases on offer. The property market has responded to the demand of occupiers, particularly with the boom of e-businesses in the last two to three years.
Colin Chivers of surveyor Insignia Richard Ellis says that signing the right lease for the business is essential. There is not only the length of the lease to consider but repairing provision, break clause, upward only rent reviews and dilapidation.
Service charges, business rates and car parking charges as further things to look out for.
"A lot of start up companies look at the base price, that is the rent, which can save them money initially but getting the wrong lease could cost them in the long run"
A solicitor will give advice and a surveyor will be able to help with the value side of the transaction. However, if you want to get a basic idea of how much space will cost, he says it can be a case of just shopping around and comparing prices as you would when looking to rent a home.
Nationally office rents can range from well under £10 a sq ft to £85 a sq ft depending on location and quality.
If you are looking for new premises or just wishing to see how your rent compares with your neighbours logon to www.comproperty.com, the largest independent commercial property website.