What Does 2022 Look Like for Commercial Property Owners?

While we have all adjusted to expecting change, having somewhat of an indication of what's around the corner will always make facing change that much easier. We’ve compiled a list of things commercial property owners, and prospective owners should keep in mind for 2022.

Adapting

‍As we progress from varying levels of lockdown to the traffic light framework, businesses once again need to adapt to new ways of operating. The key to managing the constant shifting caused by the pandemic is just that: adapting. For commercial property owners, this means understanding what businesses in your portfolio are going to be affected during red, orange, or yellow. On top of pandemic disruptions, there have also been significant changes to the market landlords need to be considering. In November 2021, the Government announced that it was making an amendment to the Property Law Act. This amendment inserts additional clauses into the contracts normally (typically a Deed of Lease) between the landlord and tenant, specifically relating to the inclusion of rental rebates during an epidemic into leases that would have predated the Christchurch earthquakes. Seeing how much this market has changed since the start of the pandemic, commercial property owners should be ready to adapt to any new changes that might pop up throughout 2022.

Planning

‍Alongside adapting, comes planning. We hear the phrase ‘new normal’ a lot these days, but in reality, we have faced a lot of different new normals since 2019 and we continue to plan for change this year. That means thinking about diversifying your portfolio. Despite market changes and lockdowns, commercial properties are still being sold and bought throughout New Zealand. Industrial in particular remains increasingly popular as they typically bring stable tenants and their ability to operate fully throughout different levels of restriction. Based on predictions for 2022, office spaces are thought to make a comeback this year. While working from home will continue to be adopted by organisations, a tight labour market means businesses will be prioritising retaining staff. As a result, it’s been projected that there will be a demand for quality office spaces that will impress (and keep) talent.

Landlord/tenant relationships

‍Maintaining positive and trusting relationships with your tenants should always be a priority. However, the pandemic has a habit of putting an urgency on most things, which means landlords should undoubtedly be prioritising keeping tenants happy. However, this is easier said than done in most cases, given the stresses also on landlords at this time.Preserving healthy relationships with your tenants will ensure your tenant stays your tenant for longer, making your investment that much more secure. With businesses rising and falling in the last few years, if you have a viable and profitable business in your property, you should be ensuring it stays in your property. This could also see an increase in requests for assignment of leases, we have certainly seen an increase over the last couple of months. However, when you have a large portfolio of properties and dozens of tenants, this can be a difficult or even impossible task to stay on top of. Luckily, a property manager will help to maintain healthy communication with your tenants on your behalf and make sure they stay as long as possible. The team at Azure has been front and centre during all the ups and downs this industry has faced in recent years. We will support you through adapting to any new changes that come your way and help you find suitable properties for your portfolio. We highly value both property and people and will ensure to maintain healthy and long-standing relationships with your tenants. Get in touch with our team to see how we can help you in 2022.