British businesses pay £382 billion on unused commercial property every year | 29 July 2013
British businesses could be sitting on a glut of unused commercial property worth around £75 billion, news168.co.uk reports.
New research from property consultancy Core Consult found that 20 per cent of all property currently being leased by the private sector could be going unused. Not only that, the rent values of these dead spaces amounts to around £382 billion per year.
It is thought much of this came from businesses downsizing as a result of the financial crisis of 2007, which saw employee numbers fall but businesses remain put either because of the cost of moving or having been tied into longer contracts.
Now, with the financial uncertainty looking to have come to an end, analysts have claimed that a raft of new properties could soon be hitting the market as these businesses with dead space finally get the chance to move on.
Speaking to ft.com of the issue, director at Core Consult, Howard Cooke, explained: “It is a real problem for a lot of companies but not one that many do much about.
“Finding other tenants to take on the leases is tough and the rent you receive is usually a long way below the rent you are paying out for the original lease.”
Despite these issues facing some businesses, the trend is very unlikely to slow down the high and growing desirability for commercial properties in the UK. As these rents are almost unique across the world (as tenants are responsible for rent, building insurance and maintenance), foreign investors look set to continue seeing the British commercial property market as being one of the best on earth.
The views expressed in this post are those of the author and are not necessarily those of Qube Global Software. All facts are verified where possible directly by the author.
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