Getting value from the Games - Penningtons advises landlords to take a long term view

Posted: 18/05/2012

Landlords and investors with properties in the Olympic area have seen a rise in residential rents. But what about commercial property? Penningtons partner Stephen Law looks at the impact of the Games on lettings in the latest issue of Estates Gazette: 

'With the Olympics less than three months away, what should landlords do with space that is empty or being remarketed? Should they enter into short-term lets to capitalise on the higher rents achievable or seek longer-term lettings?

The question is whether demand and rental levels are sustainable after the Games? The Olympics will have created an 'unnatural' market. Could we see a glut of available properties in the legacy period as properties become vacant at the same time?

Loss of regeneration momentum after the event could also adversely affect demand and rental levels. And with the UK technically back in recession, levels of demand throughout the Olympic boroughs may not be maintained. Landlords granting short-term lets now could find themselves with empty property and weaker demand.

The value of commercial property is linked to the duration of rental income and how secure that income is perceived to be. Perhaps landlords should focus on getting and keeping good tenants for as long as possible rather than seek artificially inflated rents for a short period. It may be wiser to play the long game.'

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