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The question many businesses are asking employees is not so much are you sitting comfortably but where, in fact, are you actually sitting?

Businesses have undergone significant changes in premises requirements with the rise of home working, changes in consumer habits and the economic climate. The post-Covid office landscape is certainly evolving, sometimes subtly, sometimes with a radical jolt. A transformation in the use of space is a theme that’s here to stay, observes law firm Dutton Gregory.

For companies grappling with new working environments it means not just how many comfy sofas, breakout areas and hotdesks to install, but also how best to manage the sometimes complex legal relationships between landlords and tenants.

In particular, Dutton Gregory is seeing a more collaborative approach between landlords and tenants, despite the parties often having what can be conflicting priorities.

“That’s a good thing for the property sector generally,” said Claire Bunton (pictured), a Senior Associate Solicitor at the firm. “We are seeing more landlords and occupiers getting closer together as both have been adversely affected by the pandemic.”

Business confidence returning

While a lot of landlords jumped in and acted quite quickly, Dutton Gregory found others took the opportunity to wait and see what might transpire. We are now leaving that period of hesitancy as more flexible work patterns become the norm and businesses gain confidence in the market again.

New ideas on the way forward in contractual terms include longer rent-free periods and shorter terms. “Greater collaboration means landlords are understanding their tenants’ business needs better, communicating more and generally improving the relationships with them,” said Bunton.

According to the firm, the single biggest change in the property market has been the increased use of break clauses, especially where the tenant is vulnerable to future changes in earning power. One other trend being mooted is to calculate rents on a tenant’s annual turnover.

Lease flexibility

“We are seeing more leases with condition-free breaks and fairly short notice periods. Although this helps landlords to let problematic properties it does not help with long-term yields and certainty in the property market,” said Bunton.

Uninsured risks clauses are becoming mainstream after being viewed with suspicion by many in the sector. “There is also a prevalence of generous incentive packages on leases with long rent-free periods, often in return for tenants carrying out refurbishments while they are doing their own fit out. It does seem to be rather a tenants’ market at the moment,” she added.

Overall, Dutton Gregory has a relatively high degree of confidence in the property sector’s ability to bounce back from the Covid-19 pandemic.

“We’re not out of the woods yet, though,” noted Bunton. “But we expect commercial landlords to be okay in the years ahead. As well as office space, high streets are changing, too. We’re likely to see some commercial premises being repurposed as high streets become more urbanised and offices continue a trend of relocating out of town centres.”

Decisive solutions

The firm has been adept at keeping channels of discussion open between landlords and tenants during the last few difficult years.

“Most of the time we can work to a satisfactory solution. It may not be the one a client initially envisages but, in the end, both parties are happy,” said Bunton.

The route to client satisfaction blends the firm’s in-depth property sector expertise with the crucial human dimension. “One of our strengths as a team is being good at finding creative, human solutions. Things you can’t learn in the classroom. We also like to think outside the box and take a tactical role in negotiations with landlords and tenants.”

This dedicated level of personal support extends beyond the firm’s clients, with quarterly breakfast briefings for businesses and commercial landlords and their agents a popular fixture in many south coast property professionals’ diaries.

Southern focus

In 2022, Dutton Gregory celebrates its 75th anniversary in Winchester and it’s 20th in Bournemouth. It also has offices in Chandlers Ford and Poole. The firm has around 125 staff in its legal departments, with around half involved in property-related matters.

Residential and all types of commercial property have always been a core strength of the firm, which acts for landlords, agents, tenants, developers and investors. Its full-service offering includes property and commercial litigation, corporate and commercial, employment, healthcare and immigration for business.

Regional strength is evident in the firm being named Service Provider of the Year at the Poole Business Awards and scooping the Professional Services category at the Bournemouth Business Awards.

The post-Covid period sees Dutton Gregory’s workload intensify. “We are busy at the moment – confidence in the property market has returned, which you can see particularly in the rising number of lease renewals,” said Bunton.

Supporting the SCPA

As property specialists, the firm is a long-term supporter of the South Coast Property Awards.

For the 2022 awards on 29 September at the Hilton at the Ageas Bowl, Dutton Gregory is stepping up its involvement by sponsoring a new category: Commercial Landlord of the Year. The closing date for entries is 15 July.

Explaining the firm’s commitment to the awards, Bunton said: “Industrial and commercial landlords have gone through many challenges in recent years and we feel it is right to acknowledge when they have done a good job and to celebrate the service they provide.”

She added: “We’re marking our diamond anniversary by sponsoring the new category. We’re proud to be a part of a key event that brings together professionals from across the region’s property industry to celebrate its achievements and look to the future.”

More information

Perhaps you feel as Commercial landlord you espuse these characteristics and practices. If so, perhaps you could be named Business Magazine Commercial landlord of the Year:

Enter the South Coast Property Awards here.

For more information about Dutton Gregory contact Claire Bunton

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