…perhaps you could sublet your surplus space.
The pandemic has changed the way we work, possibly forever. Firms in the Square Mile announced their operations would change to enable hybrid and flexible working, whilst 50 of the UK's biggest employers said they were not bringing staff back to the office full-time.
The dwindling requirement for office space has led many commercial tenants to acknowledge that they may have excess space, which now needs to be disposed of. However, the disposal of surplus office space is not that simple, especially if the lease does not provide for an early termination.
Maria Mowberry, commercial property partner, looks at the choices available for commercial tenants.
One option is to negotiate a surrender of the surplus space or an early termination of the lease with your landlord if you no longer require the space. However, it might be the case that your landlord is unwilling to take it back, because it may be difficult to rent out the space again, or will consider doing so, but only for a fee or change to your existing lease terms.
Another option is to sublet the space, which would enable you to recover some of the financial losses on the space that you will not be using. However, not all leases permit sublettings of part.
Always start by reviewing your existing lease, which B P Collins’ property team can help with. Existing subletting obligations and restrictions need to be considered in light of your plans, to help you to understand your options. Although each commercial lease will be different, typically if the lease permits sublettings of part, a tenant is likely to be required to notify the landlord in advance of their intention to sublet and seek their consent.
Also check your lease for any conditions around subletting the space. These could include restrictions on the type of subtenant, the permitted use of the space, the number of users allowed to occupy the premises, or whether the sublease has to include particular terms.
It’s also beneficial to choose an agent with specific experience in subletting and is knowledgeable about the current and local market.