Local and international investors alike have always considered property investment to be the best low-risk safe haven. At the moment brick and mortar offer a considerably low-risk atmosphere for investing funds. This is supported by the ever increasing number of property investors who are pouring huge investments into the UK real estate market. Disregard the fact that the UK is apparently becoming limited on space; there is a soaring demand for student accommodation, hotels, office rentals, industrial warehouses and other consumer demands. With this in mind, you may want to ask how the future is going to shape up for real estate property investors.
Experience invest estimates that the next two decades are going to shape up an entirely different twist for the housing industry. Are you a landlord with real estate property in the UK? If you are, you want to know what you are up against so pay attention to what I am going to discuss next.
Apparently, changes in demographics, as well as technology,will push for slightly flexible leases. What this means is that people will try to minimize as much as possible the property costs tied to their businesses. Large businesses and the general local real estate players alike are looking to cut on costs by sufficiently utilizing their space. This will provide a chance for them to respond to any changes in demand swiftly.
Business Constrains Due to Long-Term Flexible Contracts
While landlords can get relief from the risk cover provided by long lease terms, it would help to plan for those drivers steering for a bit more flexible models.
The demand for a flexible model will force most accommodation and rental service providers to delve into the risks involved. This is a far greater risk than most landlords will be willing to take. In return, landlords may have to demand much better compensation. Nevertheless, most organizations will still be able to substantially cut on costs by only paying for the space they use. This reduction will be apparent regardless of the high rates of the lease per square foot.
SMEs and start-ups always aim to grow with the expensive of business. But a major obstacle to this goal comes in when there is a long-term on going contract. These are just but a few of office rental consumers you as a landlord should what out for.
It should be understood, however, that the preference for long flexible lease contract relies heavily on the structure of the business and not merely on the trends. Having said that, I must add that large business with core levels of occupation may find long leases more cost effective compared to SMEs and most start-ups.Regardless,however, the business may still look to incorporate a flexible space as an addition to the existing core.
From this, it is clear that flexibility in the models of leasing is going to be tied down to the majority of future property demands, especially in London. Experience invest would advise most investors to avoid flexible models for obvious reasons. Moreover, most investors know that flexibility unleashes a major investment risk; that is there will be an increased risk of voids.
Another item to consider especially if you have invested in the office rentals is that due to changing technology offices designed as late as 1990s were mainly paper friendly. However, they are electronically derailed, and you may want to transform them to more technologically friendly offices.
Experience invest finds that reconfiguring the entire office blocks may be costlier than simply stripping the entire office blocks and starting from scratch. Upon reflecting on this, you have the dilemma of choosing between a traditional developer or tech specialists. But depending on what you want your office rentals to look like, you should not have any problem selecting your property designer.