'Inflexible' contracts have caused commercial property problems

Posted: 11 Nov 2008 12:18:48 GMT

            Property News - 'Inflexible' contracts have caused commercial property problems

A lack of manoeuvrability in commercial property contracts has helped to create a number of problems for the industry.

That is the opinion of the Forum of Private Business (FPB), which has suggested that this "inflexibility" can result in companies having to vacate properties.

A spokesman for the FPB said that rental issues and the "competitive disadvantage" placed on smaller firms because being located in the best positions is too expensive for them were also causes for concern.

He said: "For a number of reasons they are inflexible and basically lead to people vacating properties and that is a major reason behind the trend that we are seeing.

"They guarantee an income for landlords regardless of whatever economic climate we are in - regardless of whether there's a downturn or a boom - whereas they don't show that kind of flexibility for the commercial tenant.

In October 2008, CB Richard Ellis reported that commercial property values fell by 6.7 per cent in the third quarter of this year. In the second quarter, a fall of three per cent was recorded.

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