Considerations when relocating your business

It’s been a tough time for many businesses recently. As a result of changing processes during the pandemic, many companies have chosen to keep a hybrid or remote model of operation. In addition to this, businesses still continue to face economic pressures and worries as they navigate an unstable market. This has led to many experiencing financial pressures and needing to consider options including the consolidation of premises and underutilised space.

It’s not all doom and gloom though as it’s evident there is pent-up demand for growth within certain sectors. Back in 2016, many businesses were ready to upsize their premises but placed these plans on hold while the country started the process of leaving the European Union. Once the dust had settled, and they were ready to make the move to upsize, the pandemic struck and plans were put on hold again.

Another reason businesses may look to relocate premises is statutory pressure. This could be because their premises are being compulsory purchased and there is a definite need to move on, or it could be that the company has received a Section 25 notice under the Landlord and Tenant Act 1954 and need to move out.

As a result, the market is now starting to see an increased demand from businesses looking to relocate premises – whether it’s for upsizing or consolidating.

The relocation process: complex and time-consuming

While growth is a good thing for businesses, and an encouraging sign for the economy, the relocation of premises can be complicated and lengthy as many factors come into play. Firstly, companies must consider any liabilities they will need to address upon the exiting of a lease to bring the tenancy to a contractual end. This includes dilapidations, as well as correctly serving the break notice or the Section 27 notice under the Landlord and Tenant Act 1954.

Once the liabilities on the old premises have been considered, it’s all about the new. Whether it’s a new lease on office space or a manufacturing site, finding the right premises and ensuring the property is fit for purpose is critical. Once sourced, companies will need legal assistance with drafting the lease or development agreement for the new premises. They will also need technical input into development agreements and pre-acquisition advice to ensure they are fully aware of any property limitations and repair liability they may inherit. 

All new premises will need work to suit the new incoming business, whether it’s fitting out an office space, refurbishing a warehouse, or even building from scratch. Companies need to choose their suppliers wisely and have carefully drafted construction contracts, as well as an experienced project manager and technical team, to avoid disputes or issues with suppliers further down the line.

Companies may also wish to seek guidance on the tax incentives that will be available on most moves, including capital allowances.