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Since the recession in 2007 the number of businesses which have filed for insolvency has gone through the roof; this has led to a huge number of vacant properties. At present landlords are so worried about potential business tenants going bust, a six-month rent deposit has become the norm and in Mayfair 12 months is becoming more regular.
Landlords have to actively manage their vacant properties; this will help retain the value of their investment and will also prevent them falling foul of insurance requirements. The other concern is, of course, the need to keep properties in a fit condition for viewing and attracting new tenants.
The existing security arrangements and contracts for the premises should be reviewed to ensure that, while overheads are minimised, the building is well maintained and secure. The longer a property remains vacant the more it is open to risks.
If your property becomes vacant you should;
• let your insurer know as soon as possible, even if it is only partly vacant
• check the details of your insurance cover carefully and note any changes to the cover
• conduct an assessment of the risks to your property
• act on any risks identified to protect your investment
• arrange regular inspections so any changes to the property condition can be noted promptly
For the reasons above, the recession has resulted in increased numbers of vacant commercial properties. The amount of available office space in Central London has gone up by 80% between mid 2008 and mid 2009. Since then the number has become more stable but still remains high. These company and retail units’ closures across London have been repeated across the country. Many commercial property owners report a rise in squatting, vandalism, arson and break-ins.
Tom Lax, an agent at Morgan Pryce, believes, “Landlords have to invest in protection solutions such as wireless alarms and other electronic security measures in order to tackle the problems of squatters, criminal damage, arson and graffiti.” Insurers are also reporting an increase in large-scale fires. More than 50% of landlords are unsure about the health and safety regulations for vacant properties. Property owners and tenants that no longer occupy their premises need to actively manage their vacant property to ensure it retains value and does not fall into disrepair.
Morgan Pryce is a specialist tenant acquisition agent with offices in Oxford Circus and the City. Morgan Pryce specialises in search, negotiation and project management and works exclusively for tenants.