As the market improves into 2006, we anticipate that we will see the last of this activity as opportunities to exploit conditions dwindle. In web conveyancing, there will be a record for every single exchange. The administration suppliers can’t hoodwink or vacate from the confirmation. We acquired a substantial amount of modern, efficient office property in good locations on flexible terms for corporate occupiers during the year. In many cases, the location and age of the property is of paramount importance to occupiers but the importance of flexible leases should not be underestimated.
Many of the companies, while not instantly recognisable, were of excellent quality and enabled landlords to transform empty properties into much sought after investments. Many occupiers are incorrectly concentrating on the main principal commercial terms namely the length of the lease and the initial rent. Whilst there is no doubt that these are crucial to any transaction there are other lease terms that are of equal importance. We have come across numerous leases where lack of attention to detail has created difficulties for clients be it at rent review.
Dealing with repairing obligations or exercising break options. There is no doubt that if a more strategic focus on the practical clauses in a draft lease were undertaken, these difficulties would be avoided. When the firm gets the direction from the customers, one of the specialists or a qualified property conveyancer would be assigned to take care of the case.
This is a substantial amount of space given that in 2004 there was approximately 188,000 sq.m. of accommodation acquired and therefore represents close to two years supply. Nonetheless, close examination of the figures demonstrates that the vacancy rate in the city centre stands at 7.8% and is falling and the city accounts for nearly 40% of the total available stock.
Within the city centre, construction was completed on only six buildings providing in excess of 50,000 sq.m. Two of these would be considered to be in secondary locations and this limited availability demonstrates why larger occupiers are securing property years in advance of their needs. The message is clear, if you need a substantial quantum of accommodation, it must be secured early.