21 November 2023
Navigating a Challenging Market
Our Autumn Rural Report focussed on how the UK agricultural sector is facing a unique set of challenges, with rising input costs, labour shortages, and an uncertain economic outlook putting pressure on margins. These conditions only serve to highlight the importance of business diversification and the need to create the best possible return on commercial assets.
Experienced landlords with a proven track record of commercial property lettings, understand the unique challenges and opportunities associated with this sector. While landlords may have established successful relationships with existing tenants, the ever-changing economic landscape demands continuous adaptation and strategic planning to maximise returns and maintain a competitive edge. Recent economic uncertainties, including rising interest rates, have undoubtedly impacted the commercial property market. Businesses are tightening budgets and re-evaluating their workspace needs, leading to a more cautious approach to property expansion or relocation.
The UK’s commercial property market is facing headwinds, but challenges always present opportunities in any market, especially for those landlords who can differentiate their offering and understand how to attract good quality tenants seeking stability and value.
Impact of interest rate hikes
Recent interest rate increases by the Bank of England have made borrowing more expensive for businesses, causing some to postpone or cancel plans to move to new premises. This has led to a decline in commercial lettings, with a recent report from a major commercial letting’s agent showing a 12% decrease in transactions compared to the same period last year.
Economic slowdown and reduced demand
The wider economic slowdown is also having an impact on the commercial property market. With businesses facing tighter margins and reduced consumer spending, many are opting to remain in their current premises rather than incur the costs of relocation.
Given the current economic climate, commercial landlords should be prepared to adapt strategies to attract tenants. Here are some key considerations for landlords seeking to increase their chances of securing commercial lettings and to thrive in this evolving market:
- Be flexible on working hours – Understand the needs of potential tenants and be willing to accommodate flexible working hours or access arrangements
- Clear access and parking – Ensure that the property has clear access and adequate parking for staff
- Well presented buildings – Invest in maintaining the property to a good standard, both internally and externally & ensure buildings are clear ready for photos used in online adverts and particulars
- Realistic Rents – Set rents that are competitive and reflect the current market conditions
- Consider different business types – Be open to renting to a variety of businesses, not just those traditionally associated with farm lettings
- Be proactive and quick – Prospective tenants have more commercial property to choose from in this current market, therefore, it is essential to respond to lettings enquiries quickly and be prepared to arrange / attend viewings at short notice.
For more information about letting out your empty farm buildings, please give Jon or Sarah a call on 01621 212651 or email firstname.lastname@example.org