Commercial Market Commentary - May 2009 by Barry Frost, Commercial Plus

Demand for commercial property has continued to be slow during the month of May. Many commercial agents are reporting a fall off in enquiries following a more promising start to the year. Confidence appeared to be returning following the release of data suggesting that restrictions on bank borrowing had eased slightly. However the reality has been that it is as hard as ever to get any type of bank funding unless businesses can prove their viability. Viable trading businesses are of particular interest and all of the high street banks are particularly keen on these. If you are a business that does fit into that sector then you have a chance of assistance. For everyone else though things are not likely to change any time soon.

One bit of good news is that lenders in the asset finance market have implemented a phased if cautious return to the market having withdrawn completely at the end of 2008. The emphasis is still very much on the quality of the application, but a degree of common sense has returned which is very good for the retail industry as a whole.


Demand remains very depressed. As a result many landlords and agents are prepared to offer very generous early occupancy incentives provided tenants are prepared to commit to a reasonably long term lease. Even then there is a degree of flexibility that is unlikely to be repeated so the message is negotiate very hard and don’t take the first offer made. We were recently in negotiating twelve months rent free on a brand new retail unit in the Midlands that had been empty since its construction eighteen months ago. That was for starters and after several lengthy conversations with the agent we were able to obtain several other concessions including free legal advice for our client. It’s a tenants market and is likely to remain so for the foreseeable future.


It would be fair to say that there has never been a better time to purchase a freehold property for your business. Values in certain industry sectors have fallen by up to 45%, and as a result, there are some terrific bargains to be had, assuming you have the cash or are able to raise the finance.

Again negotiation is the name of the game but good advice would be to ensure that you can raise the money before making an offer as it will put you in a much stronger position. Commercial agents will want to know very quickly if you are a serious potential buyer and will often ask to see some sort of proof that you have the means to proceed.

We have spoken to several clients recently who have been lamenting the old days of banking in the UK when all but the most difficult lending decisions were made by a local manager at a local branch. After all are they not the best person in the bank to know their customers inside out? In the rush to global commerciality the banks seem to have forgotten the best traditions that made them such a rock at the forefront of business activity in the UK. There are many people who think a return to some of the best ethics of those days would be a good thing at the moment.

For market commentary on Commercial Property please contact: Barry Frost of Commercial Plus on 01244 680360 or 07973 760701 or email

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