LANDLORDS are being urged to be more flexible with their business leases or risk seeing units left empty.
The warning comes from Julie Palmer, partner at Portsmouth’s Begbies Traynor – specialists in business rescue, recovery and restructuring for troubled firms.
Mrs Palmer is making the call after seeing too many hard-pressed companies bound to contracts they cannot get out of, which force them to close down.
She said: ‘Changing market conditions mean firms, particularly professional firms, sometimes need to move.
‘In the good times, looking to impress potential clients, they have taken on plush offices in prominent locations but now find they are struggling to service their overheads and the place is simply too big for them. It’s a real problem.’
Landlords typically demand 10 to 15-year leases from professional firms.
Mrs Palmer said five to 10-year leases with a break clause in the middle might be more sensible, especially given the large number of empty units across the area.
‘Landlords need to choose whether to be more reasonable or accept long-term voids,’ she added.
‘It is a difficult market for landlords and if they refuse to be accommodating, resulting in the tenant going down, then it is all rather self-defeating.
‘Far better to be understanding, and try to meet the customer’s needs.
‘Better to have some money coming in, even if it means negotiating a deal, rather than none at all.’
She also urged the government to look into the issue and legislate on property contract reform if necessary.