Eli5: Why are so many office blocks and retail shops in UK that are ” to let” remain empty for months, rather than to reduce rent ? Why do landlords do this?
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Because if a Landlord says “you can rent this for less for the moment” then the tenants gonna be like “well why is the rent so high if you can clearly make it work with less” and then it’s outed that the landlords scamming.
I cannot answer your question, but I sympathize with the sentiment. 15+ years ago I got one of my first jobs at a little food store in a mall in my home town. The place was vacant 2/3 of the time….terrible space, easy to pass, etc. No place managed more than 1 year. It was vacant for nearly 2 years prior to the place I worked moving in…the one and only. I loved the owners. We did pretty good in the 1.5+ years I worked there. We had a good stable base income, as we were popular with other mall employees, and were gaining more and more traction. They were considering opening up another store in another city and offered to put me up for a couple weeks to train new folks when the time came. Then, out of the blue, the mall increased their rent by 50%. No warning, just renewing their lease. They closed shortly after. I kept working at that mall (quite literally in the store next door), and in 3 years no one moved into it. Such an absolute waste.
I have always suspected that the people pulling the strings on such decisions simply do not have their ears to the ground.
Lots of business reasons. Several unrented months would cost less than years of substandard rent, plus the leaving occupant may be obligated to pay out the remainder of the lease until it is rented, so there is no financial need to discount, as there is no loss occurring.
I cannot answer your question, but I sympathize with the sentiment. 15+ years ago I got one of my first jobs at a little food store in a mall in my home town. The place was vacant 2/3 of the time….terrible space, easy to pass, etc. No place managed more than 1 year. It was vacant for nearly 2 years prior to the place I worked moving in…the one and only. I loved the owners. We did pretty good in the 1.5+ years I worked there. We had a good stable base income, as we were popular with other mall employees, and were gaining more and more traction. They were considering opening up another store in another city and offered to put me up for a couple weeks to train new folks when the time came. Then, out of the blue, the mall increased their rent by 50%. No warning, just renewing their lease. They closed shortly after. I kept working at that mall (quite literally in the store next door), and in 3 years no one moved into it. Such an absolute waste.
I have always suspected that the people pulling the strings on such decisions simply do not have their ears to the ground.
I don’t know if this applies to UK at all but in the USA, it is cheaper to build a new building than to completely renovate an existing one. Here, we have empty commercial space everywhere. For example, my company built a new building on the other end of a shopping center from the prior one and it has sat empty for 10+ years. Nobody wants to pay to rehab the building and it was cheaper for my company to just build a new location on the opposite end of the shipping center
Landlords have borrowed on the value of the property to raise money for the purchase of more property or investment in business. If they rented out the property at the much lower, going market rate, the bank would re-assess the value of the property downwards and they’d face a potentially massive call for a top up on the discrepancy in value. So they’re better off leaving it empty advertised a the unrealistic price than they are adjusting the rent to the actual price.
I don’t know if this applies to UK at all but in the USA, it is cheaper to build a new building than to completely renovate an existing one. Here, we have empty commercial space everywhere. For example, my company built a new building on the other end of a shopping center from the prior one and it has sat empty for 10+ years. Nobody wants to pay to rehab the building and it was cheaper for my company to just build a new location on the opposite end of the shipping center
Landlords have borrowed on the value of the property to raise money for the purchase of more property or investment in business. If they rented out the property at the much lower, going market rate, the bank would re-assess the value of the property downwards and they’d face a potentially massive call for a top up on the discrepancy in value. So they’re better off leaving it empty advertised a the unrealistic price than they are adjusting the rent to the actual price.
Also, many departments are going silent once dispatched and using mobile computers to update their status.
Also, many departments are going silent once dispatched and using mobile computers to update their status.
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