Subletting can benefit landlords

Posted On Wednesday, 16 May 2001 02:00 Published by eProp Commercial Property News
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Landlords need to be more liberal towards tenants who sublet office space, says Rodney Luntz of property consultancy Abro Luntz.

Rodney Luntz'Tenants are under pressure to maintain their businesses. They need relief on their cash flows and one way of achieving this is to sublet,' says Luntz.

Yet many landlords will only allow subletting subject to conditions, and then not at a profit. 'This is short-sighted,' he says.

Allowing subletting, even at a profit, can create a closer relationship between landlord and tenant, keeping the tenant in the landlord's portfolio in the longer term.

The motives for subletting can vary from tenants seeking to curb costs to seeking to exploit the current tenants' market to upgrade or move.

Where tenants are paying less than market rentals, even in the current softer market, why should they not profit from subletting if they are astute enough to do so, asks Luntz.

'Clearly it makes greater sense for a landlord to adopt a partnering attitude and assist his tenant where possible. After all, his tenant is his client which a lot of landlords tend to forget.

'The landlord is in a corner at the moment due to the softness in the property market, and he should be far more lenient towards subletting.'

The main tenant, in letting unused space, secures his survival, and this helps the landlord to secure his own income stream.

But Luntz does suggest that subletting rights are granted selectively, rather than as an automatic concession.

'Either way, it is a question of riding out the storm until the market recovers, at which stage the scenario could be reassessed,' he says.

Last modified on Thursday, 22 May 2014 15:57

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