“Everyone in the City has had a problem with void space,” says City property expert Peter Thursfield of agents Savills.
Void space is where a tenant cannot get rid of existing property and it arises in various ways: business shrinkage caused by recessionary and staff cutbacks or over-optimistic planning.
Mergers or moves to new addresses without assigning the existing lease are a prime cause of void space. You can find a new tenant to sublet, but success depends on the quality and size of the building.
There are no immediate solutions, says Thursfield. “You either sell, employ more people or wait for the market to improve. You could avoid paying rates by making it unoccupiable.”
The cost of disposal is such that businesses often find a use for it, he says.
Savills' head of research, Stephen Newbold, says parts of the City and West End will have a long-term oversupply of second-hand space.