DESPITE the challenging economic climate, opportunities exist for both landlords and tenants if they are prepared to be flexible and adapt.

Traditionally a landlord’s approach was to protect the investment values of their holdings by maintaining and increasing headline rents.

However, with investment yields now being pushed out and capital values falling, many are now accepting that the values of their holdings have been hit and, faced with paying empty rates on vacant space in a difficult occupier market, landlords are starting to change their approach.

Now the emphasis is on getting space let on almost any reasonable terms with quoting rents and prices being reduced and innovative deals being offered to dispose of space.

This is certainly the sensible approach for leasehold premises as, once tenants are within a landlord’s portfolio, rental levels can be developed through effective asset management.

Occupiers such as Royal Mail (150,000 sq ft in Warrington) and Pro-Well Engineering (210,000 sq ft in Ellesmere Port) are examples of the larger end of the market taking advantage of current conditions to secure new facilities on favourable terms.

Although at present it is an occupiers market, this isn’t going to be the case indefinitely.

As existing buildings are taken up by occupiers the supply of suitable properties is dwindling, especially as speculative new development has been still for the past year and looks to remain so for the immediate future.

The result will be a shortage of supply in the market which may, in the medium term, push values up on existing stock as occupiers in the market compete for the same buildings.

The activity in the larger end of the market is encouraging but it is essential that it filters down to the smaller bread and butter multi-let industrial estates.

As the economy stabilises and liquidity returns through the Government and banks this will undoubtedly happen, but until then, the keywords for landlords will be flexibility and adaptability.

So tenants should try to take advantage of this while they can.