So far the office sector seems to have fared better than the retail and hospitality sectors which have taken the brunt of the chaos caused by COVID-19.
However, as this crisis deepens, it seems like it may only be a matter of time before the impact is fully felt in the office sector. Investors, lenders, and developers invested in the sector would do well to take early measures to manage and mitigate their risks, whether that is in the context of current occupiers, ongoing projects or managing assets secured to lenders.
We have been advising our clients on a variety of issues that have arisen as a result of Covid-19 including:
- What are my options if my tenant asks for a rent concession or fails to pay its rent?
- Can my tenant terminate their lease before it expires?
- What steps can I take to manage and mitigate the impact of the loss of rent or development delays on any asset charged to a lender?
- Can my prospective tenant unilaterally pull out of a pre-let because of COVID19?
- Can I change the terms of my pre-let with a prospective tenant due to delays to my build programme as a result of COVID-19?
- What are my options if works on my development site cannot continue due to COVID19? With whom does the delay risk sit?
- Can I pull out of an acquisition or delay its completion if I have exchanged contracts? What would I stand to lose if I did?
- Can I prevent my buyer from pulling out of a sale or delaying on completion due to Covid19?
- When can I call on a guarantor or other security if a tenant defaults on its lease?
- What steps could I take to "future proof" my assets?
Our office sub-sector team has a wealth of sector knowledge and experience and it is well placed to advise investors, developers, and funders through this challenging period - helping you consider your options on how to manage and mitigate your risks in these uncertain times.
Partner, Real Estate