Commercial Properties in Wales to Have Shorter Leases

It has emerged that on average, leases on commercial properties in Wales are set to shorten, with property advisor Dan Smith proclaiming that in negotiations with landlords, tenants are in the driving seat.

commercial properties in wales

Commercial Properties in Wales

The good news emerged from a recent report by the British Property Foundation and Investment Property Databank, which concluded that average lease durations in the United Kingdom have fallen significantly to an average of 4.8 years.

Delving into greater depth the report confirms a fall in average lease lengths by 1.4 years, dropping from 6.2 years in 2007 to 4.8 years in 2011.

Meanwhile, at just 4.1, the duration for an SME lease is currently even shorter.

Even high streets retailers witnessed a reduction in lease duration – albeit a small one at that. Their experience was a fall from 7.7 to 7.6 years between 2011 and 2012 and a fall by 2.1 since 2007.

High street retail units saw a small reduction in lease lengths, falling from 7.7 to 7.6 years this year, however in 2007 this was 9.7 years.

In South Wales – a location which holds a reputation of offering greater flexibility in leases offered, than other regions throughout the UK – the average lease length is expected to be even shorter.

This is news in particular for those looking for capital allowances businesses such as Rift capital allowances, through the dealing of commercial properties. All in all, it means that the commercial property market in Wales is more advantageous from a buyer’s point of view than in England.

However, it isn’t so much good news for landlords of course. Whereas in London and other big cities multi-national companies look to secure longer term leases on substantial buildings for the benefit of their deals, in South Wales, the tenants aren’t so prosperous and so cannot afford such luxuries.

Landlords therefore need to adapt to the times and alter their goals in order to stand in correlation with the market.