When the Covid-19 pandemic hit in early 2020, many people's working lives changed overnight. Working from home was introduced permanently, a notable change to the norm; for most companies working from home before the pandemic was relatively rare. The pandemic forced businesses to change and evolve overnight, and now many businesses utilise remote working daily.

Post-pandemic, there was much debate in the property litigation market as to whether this change would permanently alter the business tenancy landscape, with businesses seeking to capitalise on the reduced outgoings that remote working could facilitate.

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Many expected businesses to reduce their office space and either not renew their leases, surrender them, or exercise break rights. Whilst some activity of this type is evident in the market, it has not been on the anticipated scale, and it appears that the commercial property market has proven itself to be more capable of change than previously thought.

Instead, businesses are looking for their property to work harder and more flexibly for them. This includes the flexibility to adapt to an ever-changing environment, alter space, and reduce or close operations.

Many businesses are looking to attract employees into the office from their homes – and they are frequently doing this by creating a more open plan and friendly spaces where employees can collaborate with colleagues, work away from a traditional desk environment and enjoy benefits provided by the employer – and this can range from exercise spaces to coffee lounges.

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Not only does the space have to work flexibly, but the lease term also has to be able to adapt to the business, with companies looking to "future-proof" their occupation. We have noticed that tenants often seek to move from a fixed long-term lease to a more flexible or short-term one. Some tenants may seek to sub-let part of their space, giving them the option to take back that space if the needs of the business change.

If you are looking to adapt your office space, then there are several options available to you:

  • Speak to your landlord to see if they would be willing to market part of your demise – with a view to you surrendering part if a new tenant is found.
  • Discuss options regarding surrendering the whole of your demise and downsizing to alternative accommodation.
  • Check your lease to see if you have the benefit of a break option allowing you to terminate the existing lease and relocate.
  • Consider assigning the lease or sub-letting part of your premises (subject to your landlord's consent).
  • When negotiating a new lease, request a rolling tenant break option to allow you flexibility during the term of the lease. The landlord will likely require a higher rent in these circumstances, but that may be worth paying in return for flexibility.

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It seems clear that whilst office space may have taken a hit, it is by no means "down and out". There are so many uncertainties in this changing world and many reasons (including social and economic) why the office environment may be where people want to be going forward. What is key is that property changes and adapts to the world around it.

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Contact Our Property Litigation Team

If you want to discuss your options, you should not hesitate to contact the Property Litigation team via our contact form or by calling:

0161 941 4000