‘Commercial rents fall to boost firms’ says Dorset property specialist Goadsby (From Bournemouth Echo)
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‘Commercial rents fall to boost firms’ says Dorset property specialist Goadsby
MANY landlords have stopped trying to increase rents because of the recession.
That’s the view of Dorset property specialist Goadsby, which says disputes between tenants and landlords over commercial property rents fell by 23 per cent last year.
But there is a warning that some landlords could be less understanding of businesses in trouble as the economy recovers.
Only 6,604 rent disputes were referred to the Royal Institution of Chartered Surveyors (RICS) last year for the appointment of a third party to decide if the rent should rise or not. In the previous year, the figure was 8,535.
Marcus Andrews of Goadsby said: “Many rents have fallen in the recession. Most landlords have not tried to increase rents – indeed, many of the 6,604, cases where the RICS appointed an expert to set the rent were aborted without any determination being made.”
The majority of commercial property rent reviews are ‘up-wards only’, but fewer landlords have been able to justify increases.
Mr Andrews said: “With the market now more stable, and rental levels increasing, this large fall in disputes could be a one-off.”
He added: “Although ‘upward-only’ rent reviews mean that landlords were under no obligation to adjust rents down-wards, some landlords have agreed to lower rents for long-standing tenants who have been unable to pay the full rate, because their business was struggling in the recession.
“Some landlords have taken the view that it is better to have some income than an insolvent tenant or a vacant unit. “These ‘grace periods’ will come to an end as the economy picks up.”
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