2019 was a mixed year for commercial property with Brexit continuing to dominate the political and economic landscape. So, what is likely to have the biggest impact on the commercial property sector in 2020? Unsurprisingly commentary suggests politics, economy, sustainability and technology. Yes, the ‘B’ word will stick around for a long time.
Whilst the result of the General Election should provide greater clarity and stability, Brexit and the US Presidential election will both have an impact on business in the UK in 2020.
As always, what is a threat to some, can be an opportunity for others. In 2019, our commercial property team saw shorter contractual terms for leases, retail landlords reducing rent on renewal and an increase in tenant break rights which has in turn led to a greater balance in the landlord and tenant relationship. Landlords and tenants, particularly in the retail sector are working more collaboratively as both acknowledge that what is good for the tenant’s business, is ultimately good for the landlord too.
Climate and sustainability is a hot topic that will continue to impact all areas of our lives, including property. The Government is looking to commercial property as it works towards its goal of net zero emissions by 2050. Landlords should keep one eye on the Government’s consultation on Minimum Energy Efficiency Standards which proposes amending the Energy Efficiency (Private Rented Property) (England and Wales) Regulations 2015 (SI 2015/962).
The goal is to require all non-domestic privately rented properties to achieve a minimum Energy Performance Certificate (EPC) rating of B or C by 1 April 2030. There is likely to be a “cost effectiveness” test which will look at the expected value of savings on energy bills over a seven-year period. The test will be met if that sum is equal to or greater than the cost of the measures required to meet the standard.
Technology and sustainability go hand in hand, and new working models mean that good quality, well connected office space is in demand. Energy efficient, low carbon shared spaces with good connectivity to high speed broadband are increasingly desirable. Cornwall is a hive of activity when it comes to advances in technology and sustainable business and more clients are coming to us with creative business ideas where sustainability is ranked highly. Cornwall is also making advances in geothermal energy and lithium exploration and we strongly believe that interesting and exciting times are ahead.
Get in touch
If you would like some help with an issue relating to commercial property, our experienced team at Murrell Associates would be delighted to help. You can contact Tamsin Mann on 01872 226990 or by emailing email@example.com
Murrell Associates is a specialist team of corporate/commercial lawyers, with experience in large London and West Country legal practices, providing commercial legal services to UK and international businesses from their offices in Truro. www.murrellassociates.co.uk