Commercial property plagued by 'inflexible' contracts

Inflexible commercial property contracts are a "major reason" for the industry's troubles and can lead to firms vacating properties, solicitors in Northern Ireland may want to know.

That is the opinion of the Forum of Private Business (FPB), which has said that the contracts contained clauses providing for regular reviews that lead to increases in rent, making many unable to meet the cost.

"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," an FPB spokesperson said.

"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."

The third quarter of 2008 saw commercial property values across the UK and Northern Ireland fall by 6.7 per cent compared to three per cent in the second quarter, according to data from CB Richard Ellis.
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