Top tenant trends in 2024

May 2024

A lean towards diversification amongst rural landlords has created a temporary (we hope!) surplus of buildings to let and with less tenants actively seeking, this in turn means there is more competition for those tenants who are. As we review calls and enquiries coming into our office we note the same features which consistently stand out as attractive to prospective tenants. Understanding these features, and being ready with information to provide to potential tenants, is crucial for landlords looking to maximise occupancy rates and rental income.

FLEXIBLE SPACE

Commercial properties that offer flexible operating hours, adaptable layouts, and customisable features for example, potential to partition an internal office, are highly sought after. Tenants like to know there is potential to accommodate growth or reconfigure the building to suit changing needs without the hassle of relocating.

POWER REQUIREMENTS

Three phase power is important due to it’s higher power capacity and wider compatibility with equipment and machinery, lower energy bills over time, and potential scalability for businesses. Properties supplying three-phase power are better equipped to meet the demands of a wider range of potential tenants, making them far more attractive than those with only single-phase. Investing in higher power will allow landlords to future-proof their properties and make them easier to re-let to future tenants.

SECURITY

Modern tenants are a lot more security-conscious that they once were; and with more rural locations offering commercial properties, the ‘off the beaten track’ mentality does not hold as strong. Tenants want to know before even viewing sites that security systems will protect their business interests. This includes features such as an electric security gate at entrance, coded entry systems, or CCTV. Something as simple as knowing other tenants on site have been there long-term without problem is always received well by tenants.

ENERGY EFFICIENCY & SUSTAINABILITY

With growing awareness of environmental issues and cost-saving measures, tenants are starting to consider energy-efficient properties. Buildings with LED lighting, eco-friendly construction materials, insulated walls, absence of leaks/defects in building structure would not only reduce operating costs for tenants but also align with social responsibility targets. Despite this, cost is still key and both landlords and tenants will understandably continue to put their bottom line above environmental responsibility.

TECHNOLOGY

As tenants try to reduce costs and often consolidate office and storage spaces, technology now plays a crucial role in their search. Commercial properties equipped with technology infrastructure, including high-speed fibre broadband and sufficient power sockets throughout are highly desirable to tenants seeking hybrid commercial property options.

LEASE TERMS

As has long been the case, flexible lease terms continue to influence a tenant’s future plans and their readiness to sign up to tenancies. Tenants are ever cautious of market instability and the effect of potential site-wide rent reviews on their ability to manage future costs. This means it is key to keep a balance between offering the option of both shorter and longer lease but also providing reassurance that if taking a longer lease, then rent will not be unreasonably hiked up within 12- 24 months. If you would like further details please call Sarah Thurmer on 01621 212651