Rent Commercial Property Or Is It The Right Time To Sell?
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If you are looking to rent commercial property out, because of tenant vacancy, you are not alone. Commercial property vacancy rates remain stubbornly high, and there are definite concerns about future prospects. This is especially the case in the UK's regions, outside of London.
A commercial property rental study by the Local Data Company, February 2010, saw the discrepancy between retail vacancy rates in the South, and the North, increasing. Vacancy rates are as high as 24% in Wolverhampton, but high vacancies in the North East were also recorded, with 14% of those out to rent commercial property, reporting vacancies. In comparison, the South East of England had a retail vacancy rate of just 9%.
At a time when rental incomes have fallen, you need to rent commercial property as fully as possible. But full tenancy has not been easy to achieve over the last few years. With the commercial property market so strongly coupled to the direction of the wider economy, many of your tenants will have been taken to the wall, during the recession of the last two years.
But what of the future - will you be able to rent commercial property out more readily as the recovery gains strength? Unfortunately that looks like a remote prospect - the economic outlook has been getting darker over the last few months. Massive cuts in government spending, to tackle the growing budget deficit, are going to hit the economy hard, with much of the UK's economy dependent on government spending, or public employees' wages. But there will also be a direct hit on the commercial office sector - 20% of its space is taken up by government, so there will be a slew of new vacant space in that sector soon.
Moreover, there is now a serious prospect of higher inflation around the corner, courtesy of rising commodity prices. This raises the distinct possibility that interest rates rises cannot be far off. Historically low base rates have served to keep a lid on loan repayments during the recession. If they were to rise, it could push many tenants to the brink of insolvency.
It is the combination of these negative economic developments which is making owners looking to rent commercial property despair. Tenants are likely to remain thin on the ground for some time to come, threatening you with default on your own obligations. This is already becoming a reality, with the trade body for insolvency practitioners, recently revealing that the property industry has recorded the highest number of insolvencies, in comparison to other industries, during this recession.
Perhaps a more realistic approach, if you have commercial property for rent, is not to rent commercial property, but to sell it. This would allow you to release much needed equity, pay off debts, and position yourself to re-enter the market when the outlook is more positive.
SellMyCommercialProperty could help you here. We are a commercial property investment company, who have substantial lines of finance available. We can buy direct any commercial property you have. We can offer to make initial assessments of your property within 48 hours, if speed is important, and then expedite a sale agreement. You get a fair market price, without agency fees and hassles. So get in touch with SellMyCommercialProperty today, and let us transform your outlook from, how to rent commercial property out, to how to invest in your next opportunity.
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