The latest RICS Commercial Property Monitor suggests tenant demand remains subdued across much of the UK commercial property market, but what does that actually mean for investors?
In this episode, I look beyond the headlines and explore how weak occupier demand impacts leasing negotiations, incentives, void periods and ultimately investment performance.
I share how I'm adjusting my own deal analysis in response to current market conditions, including increasing void assumptions, allowing for longer rent-free periods and taking a more conservative approach to underwriting acquisitions.
Topics covered include:
What the latest RICS occupier market data is telling us
Why weak tenant demand doesn't always show up in headline rents
The difference between headline rent and net effective rent
How negotiating power shifts when tenants have more options
Why leasing transactions are taking longer to complete
The growing divide between prime and secondary assets
How I'm changing my underwriting assumptions in today's market
The occupier market data isn't telling me to stop investing. It's telling me to be realistic. If a deal still works when you allow for longer voids, greater incentives and slower transactions, it's likely to be a much stronger investment.
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