Find a commercial property to rent
Whether you are looking for a new office, shop, warehouse or hotel, finding the right commercial property is crucial to your business’s success. The first thing to decide is whether you want to buy or rent property – a decision that rests on the type of business you own, and your plans for its future.
Most businesses in London choose to rent commercial property rather than commit to buying it, as it ties up less capital than buying property and gives you more freedom to relocate.
For businesses looking to rent commercial property in London, this guide outlines a few of the things you should consider before you commit to a commercial rental property. It should also introduce you to the variety of procedures you should consider when renting a property, from choosing the right type of property for your business to terminating the lease at the end.
Renting Commercial Property in London – Advantages and Disadvantages
Before you start looking for a commercial space London, it is important to consider whether renting is the best option for you, or whether you should look for commercial property to buy.
Advantages to renting commercial property in London:
- Flexibility – not being locked into owning a property, you have more freedom. So if your business grows in size or you want to relocate, as soon as your lease runs out, you can move
- Finance – renting commercial property ties up less capital than buying business property, freeing up money you can use elsewhere in your business
- Interest Rates – though your rent may rise when it is reviewed, you are not exposed to rises in interest rates
- Safety – renting commercial property means you are less likely to have unexpected financial shocks, and falls in property value do not affect you
- Less Responsibility – you will not be as responsible for building you rent, as many of the repairs and maintenance duties will fall to the landlord
- Negotiation – you or your agent will be able to negotiate all terms of the lease with the landlord before you sign the business lease.
Disadvantages to renting your own commercial property:
- Rental Increases – when the lease is reviewed, your landlord has the power to put up the rent
- Property Ladder – if the commercial property you rent gains in value, you will not be the one to benefit
- Multi-Occupancy – if you are in a multi-occupancy office, you cannot predict who will share the building with you. Also, if you want to rent a shop, you may not be able to also rent the space above it
- Service charge – renting commercial property means you may have to pay a service charge.
Generally, for the first five years of occupancy, renting commercial property works out far cheaper than buying commercial property. It then becomes about equal for the next five years and becomes more expensive from then on. If you are looking for business premises to occupy for far longer than ten years, you may wish to consider buying commercial property. Anyone else should consider renting.
Commercial property may be subdivided into four main sectors:
- Retail – shops, warehouses, supermarkets, shopping complexes etc
- Offices – multi-occupancy office blocks, standard offices, business centres etc
- Leisure – public houses, restaurants, hotels etc
- Industrial – warehouses, industrial units, land etc.
Which type of commercial property you choose to buy/rent in London depends on the needs of your business. A few factors you may wish to consider before deciding which commercial property ro go for include:
- Facilities – for examples: some industrial units may not have all the electrics you require, whilst offices in Central London may lack parking
- Impressions – anyone dealing with clients and customers should consider what impression the property you wish to rent gives
- Productivity – though a certain building may be cheaper to rent, it may not be so comfortable and productive for your staff, so will cost more to your business in the longer term
- Space – for example: if you require a large amount for storing goods, a warehouse may be the best option for you
- Legal Requirements – whether the property meets health and safety and fire requirements.