Newsletter Q3 2017 UK

Newsletter Q3 2017

There are still numerous unexploited possibilities of sharing-economy innovation in the commercial lease market. The financial upside of higher utilisation of lease premises may be substantial, and the risk compared to the status quo scenario is considered minimal. Providers of office hotels and shared workplaces may face a slightly higher risk, though. Given the current market situation, tenants are more willing to pay a slightly higher rent for shared workplaces with services included. Nevertheless, the question is whether businesses will continue to work from shared workplaces/offices when the economy turns – just like consumers cut back on travels, workout memberships and cinemagoing when there is less room for spending. Conversely, the need for flexible tenancy agreements and the option of up- or downscaling office premises may become an even more important parameter in an economic downturn, irrespective of slightly higher costs. indications of a slowdown in the advances of the sharing economy or on-demand services, and we intend to continue to closely monitor the opportunities that the mega-trend offers in terms of long-term investments in commercial property. At Sadolin & Albæk, we are currently not seeing any

the public at an hourly parking fee, for the benefit of the area’s remaining residents and visitors. This provides the landlord with further additional income on surplus resources which would otherwise remain unused. When developing Pakhusene, the advantages of the sharing economy played an important part. A double capacity utilisation involving the canteen and parking spaces is possible because of the unique location of the property. However, the sharing of facilities puts demands on the framework conditions of the lease premises. Apart from being required to cater for a great number of employees during the day, the same canteen area must serve as a cosy and more intimate setting for dinner functions and restaurant guests in the evening. Possibility of higher returns As for developers of shared offices, higher utilisation of surplus resources, e.g. available canteen and parking spaces, may help to achieve stronger cash flows and, by extension, better ROI ratios. In the investment market, too, an increasing number of investors have become aware of the advantages of the sharing economy. According to Michael Bruhn, Director of PFA Ejendomme, mega-trends, including the sharing economy, are increasingly acknowledged when making long-term property investments. This was also the case when PFA recently invested in Pakhusene.

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