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Commercial property market
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Firms should consider a fresh approach to offices


As government support for business unwinds and evictions are back on the agenda, accountants could benefit.

27th Sep 2021
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The world has changed irrevocably since the beginning of last year, as have the activities and needs of accountants.

In early 2020, the vast majority of us believed that it was almost impossible to carry out our working duties from anywhere but a fixed office, many feeling at least a twinge of guilt on the days when they worked from home, perhaps to cover a childcare issue or await the remedy to a plumbing disaster.

Partners believed that in order for teams to bond, they needed to sit together, interacting on a constant basis.

Little did we realise that this theory was, at the very least, only one of several effective approaches to maximising productivity and arguably, far from the best of those available.

This columnist has suggested on a number of occasions that for many in our industry offices could become completely redundant, while for a much more significant proportion, the standard working week need typically require attendance in the office on only two or three days.

On the other side of the equation, depending upon the future path of the pandemic, the amount of space taken up by each individual may need to expand to provide for social distancing in order to keep everybody safe and the office ticking over without a constant stream of enforced absentees.

As a result, accountants should already have been considering their requirements for office space and the amount of money that they need to spend.

It seems like a racing certainty that those charged with this duty will have identified significant savings that can be achieved either by downsizing or dispensing with rental payments completely.

If you are going through this process at the moment or considering doing so boldness could well prove invaluable.

However tough we might think things have been for accountants, those in the business of letting out commercial property are likely to have fared far worse. Their position is unlikely to improve in the near future either.

At the same time, there has been an embargo on evicting tenants who were unable to pay rents or, for that matter, refused to do so. That is coming to an end at the same time as several of the other crutches provided by government to support potentially failing businesses.

There will be a number of consequences, all of which could prove helpful when entering rental negotiations and property acquisitions.

First, it is a sad fact that many businesses are likely to go under in the final quarter of 2021 or soon after as owners realise that, without government support, their businesses are not viable.

Even those that survive may be in dire straits, forced to cut costs which might very well include those on property.

The upshot is that there could be a glut of commercial premises available and, despite the prospective impact of inflation, those with empty property should be willing to strike deals that would have been unthinkable two years ago.

What does this mean for us? Those who are really hard-nosed might seek to escape from long leases and challenge the landlord to take action. Perhaps more realistically for highly principled accountants, there could be an opportunity to renegotiate lease terms on the basis that times are hard.

Anyone coming to the end of a lease or a break clause should be looking at reductions on the basis that they are in a much stronger position than their landlords.

Finally, on the assumption that there will be lots of property on the market, the best bet for many might be to think about moving to a smaller office with a significantly lower rent.

Having saved all of that money, it is then up to partners to decide whether they wish to share it with staff, reduce fee levels for loyal clients (ho ho) or spend the extra money on a new Porsche, Spanish villa or bringing forward retirement by a year or two.


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