How Can Commercial Landlords Increase Rental Income?
The rental landscape has experienced a transformative shift in recent years, bringing the rise of the ‘Rental Revolution’. A combined result of the pandemic and the Rental Revolution, office vacancy rates increased to roughly 9% in 2023 in comparison to 4% pre-pandemic. As a result of the increase of vacant office space in London, landlords are being forced to adapt by offering flexible lease terms and re-designing properties to meet evolving needs.
Flexible leases
The role of the office has changed with office workers reporting that working in-person with colleagues is the primary reason to come into the office. Being with people is now considered the new amenity, and what could bring people back to the office if they haven’t already made a return.
There is an increasing need for flexible leases as companies solidify a hybrid working model. Companies are now opting for co-working spaces as a result, offering not only lease flexibility, but also the ability to downsize their office space and instead make use of ‘third spaces’ or communal areas.
Amenity-rich spaces
Amenities are now essential attributes of a great workplace. Today’s amenities now extend beyond the basic needs; occupiers are now looking for amenities that deliver the greatest value directly connecting to people’s needs, innovation and collaboration.
Office spaces that have (or have access to) outdoor workspaces, focus rooms. Innovation hubs and quiet/tech-free zones are now highly sought after.Companies are willing to pay a higher price for spaces that offer a well-rounded experience for their employees, rather than incurring the high prices of replacing a good worker.
Landlords are beginning to realize the need to upgrade their properties and amenities, with studies showing that over 91% of building owners are convinced that offering enhanced amenities will increase leasing velocity and rental income.
Tenant-ready
A CAT A+ fit-out is a great way to help convert your CAT A space to a ‘tenant-ready’ or ‘plug and play’ office space. CAT A+ combines all elements of a CAT A fit-out with the added features of a ‘practical’ CAT B fit-out;
- Furniture
- Fitted kitchens and toilets
- Partitioning including meeting rooms and breakout spaces
- IT installation and infrastructure
Providing tenants with the opportunity to quicken the process of their office move can increase the appeal towards your commercial space, and your ability to increase the rental value.
Conclusion
The commercial property market continues to evolve. To stay ahead of the curve and increase the value of your property, get in touch with one of our project consultants.
