2024 proved to be an interesting year for the UK commercial property sector, as large organisations demanded a return to the office and growing numbers of organisations refined their approach to hybrid working.
Here, we speak to commercial property expert, Jonathan Hand, the Founder and Director of The Lease Negotiator, about how he carved his niche in helping business owners’ source and negotiate terms for commercial property, while gaining insight into how the sector has fared in 2024, his predictions for 2025 together with expert guidance for business owners ready to sign their next lease:
What inspired you to launch The Lease Negotiator? How has the business grown since inception?
Having worked as a commercial property agent advising landlords and property owners for over 20 years, it often surprised me that those who knew most about property (the landlords) were paying agents to provide them with advice and to negotiate the best deal.
Whereas the business owners who had less experience and knowledge often would represent themselves, and more often than not agree to lease terms that would end up being detrimental to their business. This felt very unjust and unfair. The costs of running a business are high and mistakes that business owners make, can end up costing them tens, if not hundreds of thousands of pounds.
When I looked into the market, the first thing that struck me, was how little representation there was out there for business owners. In fact, I would estimate that over 95% of commercial agencies represent landlords.
As a result, I launched The Lease Negotiator to help provide a better voice for business owners in lease negotiations, while ensuring they could make better informed decisions and ultimately agree a fairer and better lease deal.
What challenges do you typically solve for your clients?
We are committed to utilising our knowledge and expertise of the commercial property market so that growing businesses can make better decisions, that will improve profitability and help drive scalable growth. Whether this is sourcing their next location or negotiating favourable lease terms.
By bringing us on board as the as commercial property experts, our clients save a vast amount of their time, cost and resource – which enables them to remain focused on where they are most productive, which is running the business.
Commercial property matters can take up a large amount of time and if you don’t deal with it on a day-to-day basis, it’s very common to make costly mistakes with both short and long-term impact.
What should business leaders look out for when signing new commercial leases?
As it is the landlord’s solicitor who drafts the lease, there are a number of red flags that business leaders should always watch out for, with the main ones comprising of:
- Hidden costs, such as service charges
- Excessive rent review clauses
- Restrictive use clauses
- Limited lease renewal options
- Unclear maintenance and repairing duties
- Not enough rights to sublet or pass on the lease
- A heavily conditioned break clause
Commercial property leases are bound by archaic and sometimes complex terminology, where it can be difficult to decipher certain clauses, so it is advisable to seek guidance.
How has the commercial property sector faired in 2024?
With the uncertainty around the election and the first Budget of the new government, many businesses had put their plans on pause and waited to see how they were going to be affected.
As a result, the Q3 2024 RICS UK Commercial Property Survey results continue to portray a somewhat underwhelming market backdrop, with only marginal improvements seen across most indicators
It’s been a tough and uncertain year for many businesses, but those who have invested in clear growth strategies are seeing the reward particularly in advancing industry sectors like BioTech.
What trends do you foresee shaping the sector in 2025?
As larger businesses push for their employees to get back to the office, it is likely we will see this trend continuing and filtering through to smaller companies throughout 2025.
Prime office rents are expected to rise, however secondary offices, that are more dated and in poorer locations, will continue to struggle – more so if Landlords don’t invest in required refurbishments.
In addition, the demand for secondary industrial space, will continue to cool leading to greater incentives being available for tenants.
There are some signs that the retail market will improve, which is good news for shopping centres and the High Street. However increased costs will again put pressure on business.
Overall, the majority of businesses are unfortunately facing rising costs following the autumn budget, which means there will be a greater focus on minimising lease costs.
What is next for The Lease Negotiator?
2024 has been an excellent year for The Lease Negotiator as we have secured new client partnerships and exceeded our own growth objectives. Moving into 2025, we will continue our focus on providing the best property advice for our clients and help them to achieve their own growth objectives by finding them the most suitable properties and then negotiating favourable leases, with the right foundations to scale.
For example, in a recent lease negotiation we have saved one of our clients £453,000., which will make a massive difference to their bottom line.
For more information about The Lease Negotiator, please visit: The Lease Negotiator