Commercial Landlords facing biggest crunch since 2008

THE TIMES REPORTS THAT REMOTE WORKING LEAVES OFFICE LANDLORDS FACING WORST CRUNCH SINCE 2008.

In the wake of the coronavirus pandemic London office vacancy rates are forecast to hit their highest level since the financial crisis as companies look to shrink their headquarters and focus on remote working.

The Times has reported that vacancies are forecast to rise from 6.5% this year to 7.2% in 2021 before peaking the following year at 8%. After almost six months of remote working, companies are radically rethinking their office requirements, which threatens to have profound consequences for city centre economies.

Several large corporate firms are planning to offload office space following the pandemic. As an example, after tripling the size of its London headquarters last year, Monzo bank is now trying to sub-let a floor in its office along with other big companies including HSBC and Nationwide.

ARE YOU A COMMERCIAL LANDLORD OR MANAGING AGENT?

The temporary changes to Commercial Rent Arrears Recovery (CRAR) rules implemented as a result of the pandemic are scheduled to remain in force until 30th September and continue to prevent landlords exercising CRAR unless at least 189 days’ rent is outstanding.

THE NEW CODE – COMMERCIAL LEASING

As part of the new code of practice relating to commercial leases during the continuing pandemic the Government encourages tenants to continue to pay their rent in full if they are in a position to do so and advises that others should pay what they can, whilst acknowledging that landlords should provide support to businesses if they too are able to do so. We will continue to update you on this as the Government release further legislation or guidance relating to CRAR and forfeiture.