Solicitors’ lease idea is cut above (From Worcester News)

Solicitors’ lease idea is cut above

3:00am Friday 19th June 2009 in

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BUSINESSES looking for flexible lease solutions in the current tough trading conditions gave a Worcester law firm’s commercial property department a record first quarter.

Thomas Guise Solicitors has had a threefold increase in enquiries for advice on commercial property leases since the start of 2009. Director Stuart Bailey expects the trend to continue.He said: “The message we are getting from our clients is clear, they are unwilling to commit to long term leases in the present economic climate and are looking for solutions which suit their businesses.

“We are working on a large number of lease renewals with tenants to negotiate a shorter lease or to agree a break clause on longer leases. In many cases, businesses are relocating to reduce costs but where they are staying put there is a clear recognition from the landlord and the tenant that rents have to reflect the current market, so they are staying the same or even going down.”

The firm, which works with companies across the south Midlands, has also advised on a number of deals when the lease has been changed to allow the tenant to sublet or rent out part of the property.

Mr Bailey said: “Traditionally, landlords have been against this type of lease, because it can cause additional complications, but we are seeing an increasing number of landlords being more flexible.

“The landlord recognises that the business may need to earn an extra income stream and knows that a good tenant is a hard thing to find at the moment, and so is far more accommodating to ensure their property remains occupied.”

Thomas Guise acted for Worcester butchers M&M Meats to complete a deal which demonstrates how businesses are diversifying their leases. The butchers has been in St Swithin’s Street for the last three years. It has just renewed its lease for 10 years but, as part of the deal, the family can now rent out the flats above the shop.

Butcher and company director Matthew Nelmes hopes the deal will allow them to cash in on a student boom expected in the city when the university’s new Castle Street campus opens later in the year.