More than 50% of respondents say they are ‘satisfied’ with their overall commercial property occupancy
, according to a survey measuring satisfaction among UK commercial property occupiers.
The leasing process, rent review terms and conditions achieved in negotiations, and relinquishment of commercial property tenancies were the three procedures found most satisfying by commercial property tenants. On a rating of 1–10, where 1 is least satisfied and 10 is most satisfied, these commercial property processes scored an average of 6.2 out of 10.
Satisfaction with arrangements for commercial property landlords’ service charges showed little year-on-year movement, scoring 4.3.
Sustainability was the issue commercial property occupiers felt needed most attention from commercial property landlords, warranting an average mark of just 4.
Large businesses, defined as commercial property occupiers with more than 250 employees, are more satisfied overall, returning an average score of 5.4 compared to 5.0 for small and medium enterprises, defined quite sensibly as commercial property occupiers with fewer than 250 staff. These figures are broken down further to reveal that the responses were not distributed evenly: 20% scored 1–3 out of 10 and 16% gave 8–10, with the rest hovering around the 4–7 mark.
Occupiers of industrial commercial property (4.9) are found to be less satisfied overall than commercial property tenants of retail (5.2) and office space (5.6).
The key issues of commercial property tenancy explored in greater depth were found to be:
Negotiating leases. Extensive discussions between commercial property landlords and prospective commercial property occupiers appear common. Initial terms offered by commercial property landlords were rejected by 80% of respondents. Subsequent agreements were reached on the original terms by 40% of the 80% who initially refused, entailing negotiation of alternative concessions.
The leasing process. Despite a recurring pattern of industrial commercial property occupiers being least satisfied, this area is described as showing ‘a gradual increase in the level of satisfaction with the leasing process’ overall.
The rent review process. Satisfaction is rated at 5.1, down from 5.4 with 3% of commercial property occupiers grading their most recent rent review as ‘better’ than previously. This compares to 28% labelling it ‘worse’ or ‘much worse’.
Service charge arrangements. Commercial property occupiers’ answers remain in the low 4s: 4.3 on this occasion. Over half (56%) had received a service charge budget from their commercial property landlords, whereas almost a quarter of commercial property occupiers (24%) saying ‘either a minority’ or ‘none’ had done so.
Applying for consent. This area saw a relatively large jump in satisfaction from 4.0 to 5.3. Commercial property occupiers waited less than 30 days in 68% of cases. Applications exceeding 30 days were reported as being 30%, which is down from last year’s 42%.
Sustainability. There is some improvement; among commercial property occupiers the score is now 4.0, up from last year’s 3.5. There is a marked split in commercial property sectors: retail achieves 4.6 and offices average 3.8 but commercial property occupants consign industrial to a 2.6.
Data was gathered from the responses of 159 commercial property occupiers, across the three main commercial property sectors of offices, industrial and retail. Questions are based on the Code for Leasing Business Premises. The survey was commissioned by the Property Industry Alliance together with Corenet Global.
