1 in 10 Scottish businesses may not renew their office lease
August 12th, 2008 | by Simon RattrayUp to 4,000 small businesses could be at risk north of the border according to a new survey commissioned by mobile phone operator, 02.
Out of 500 businesses that were questioned, over 1 in 10 plan not to renew the lease on their office. Perhaps more worryingly is that approximately 30,000 small businesses have left their business premises since the end of 2007. The data also revealed that over 60% of those questioned are thinking of terminating their business within a year.
Pressure in the economy is making small businesses reticent to commit to further rental agreements. With greater flexible working practices now on offer such as virtual office packages, it is very tempting for small businesses to work remotely and remove the costing of leasing/licensing office space from their balance sheet.
Office vacancy rates have increased fifty percent in some UK cities compared to 12 months ago, according to NB Real Estate. This is a disturbing development considering how well the Scottish Office market has been performing over the last two years, particularly in Edinburgh and Glasgow.
Limited supply of Grade A office space in particular may ensure that rental levels can continue to increase in the near future.
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