Market uncertainty will dissipate as we all take our first steps in the post-pandemic property marketplace, but flexibility is the one legacy of recent times that we should remain mindful of

There’s little within the commercial property marketplace that the pandemic has not upended, with seismic change occurring in a comparatively short period of time. As the crisis has unfolded, government restrictions have seen business models face unique pressures as they rapidly evolved and repositioned to meet the new reality of operating during a global health crisis and economic downturn. Analysis and alteration to property requirements and costs have featured prominently as swathes of industry have strategised their survival and restructured their models to adapt to the impact of COVID-19.

As formal restrictions have eased and we see the beginnings of better times appearing – there’s been no instant return to the ‘old’ normal, but nor has there been a definitive emergence of a new one. We are entering a clear ‘transitional’ phase within the property market as stakeholders assess what their requirements will be in in an environment still permeated by uncertainty. As businesses position themselves for the future as best they can, these several unknowns continue to place substantial downward pressure on the risk appetites of both landlords and tenants. Clarity – the one business element that provides a fixed point for decision making, will remain elusive for some time.

Omnia Managing Director and property industry veteran Joanne Race cannot recall such large-scale changes occurring so quickly before, but doing business in an uncertain market is not a new challenge. “Operating in a property market without clarity – where we simply do not know what the mid to long term structural changes that this pandemic has induced – requires flexibility from all parties,” she said, adding “Anyone who tells you with confidence exactly what type of investment a landlord should be making, or what length or cost of lease a tenant should prefer, based upon predictions of an unknown future is simply not a property veteran. All parties need to talk about what works for each other in their current circumstances while allowing flexibility to reassess in the future.”

Theres firm agreement that commercial real estate remains one of the most attractive sectors for investment. With substantial opportunity for new market entries and the repurposing of existing assets to meet increasingly diversified needs such as shared office space, property still provides attractive yields for experienced investors. The uptake of hybrid working and continued pressures on retail and commercial margins, from both the pandemic and Brexit, when coupled with inflation has altered how businesses presently see their property requirements. Surety in these new requirements is not absolute. Commercial tenants are typically seeking smaller, more flexible footprints without onerous long-term lease requirements while generally acknowledging that business is in unchartered waters. Serviced offices are a rapidly growing segment within the market, driven by this commercial demand for flexibility. Omnia has quickly established scalable solutions to service the burgeoning serviced offices sector, as well as tailored redeployment planning to meet the needs of landlords looking to transition into this space as market appetite shifts.

Omnia’s Operations Director Amy Ryan believes that communication and realistic expectations remain the key drivers to securing win-win outcomes for tenants and landlords, stating “Aligning expectations, and ensuring that all parties remain in constant communication, remains the simplest and most proven way to deliver results that everyone can work with and plan around. Landlords are best advised to accept that businesses are reassessing the operational cost property plays in their models. Tenants must remain mindful that the commercial realities landlords face are as important as their own.”

With over £650 million in property value under management, Omnia has fence-line insight into current market requirements which position them to help commercial tenants and landlords alike chart a path through the presently uncertain waters.

“We’re in daily contact with stakeholders across the spectrum,” Amy added, concluding “the picture that is emerging is that more flexibility is required by landlords for lease lengths, maintenance and costs – but the best opportunities are being secured by tenants who are actively willing to partner with landlords to find a middle ground that works for both parties when it comes to leasing and lease management.”

Established in Sheffield in 2004, Omnia Property Group is one of the nation’s major players in property with operations covering block and commercial property management, office and commercial lettings, student accommodation, residential lettings and facilities management.

To find out more about how Omnia can help you with your property requirements, or to speak with one of their local property managers, contact Omnia on 0114 2792840 or blockmanagement@omniaestates.com for a confidential and no-obligation discussion.