7 December 2022 by Amira Dabbous

How to excel with office space

In a post-pandemic world, a flexible workspace is becoming the default modern office working environment.

Landlords often enter into a conventional lease arrangement when leasing office space.

However, many landlords will also enter into a Property Management Agreement, under which they appoint a manager to manage a multi-let commercial property.  According to Workthere, the use of Property Management Agreements in the UK has increased by 32% since 2019.

The landlord will typically enter into a Property Management Agreement with a specialist workspace management company, which sets out the commercial terms.  This approach allows landlords to take a back seat on the administration side of things, whilst capitalising on the space.  Some of the advantages of PMAs for both parties are that they:

  • offer more flexibility
  • create a high return if the operator is of a high quality
  • generally, provide wider rights that are less restrictive than a standard lease
  • can avoid the need for registration at the Land Registry (depending on the terms of any relevant mortgages).

Among other things, the terms of a Property Management Agreement often include details of the property manager’s rights and obligations (for example, in relation to incurring third party costs in the management of the property) and provisions dealing with how property manager’s fees are calculated and paid.  Depending on the circumstances, Property Management Agreements can vary significantly in terms of detail and complexity.

If you would like advice on a Property Management Agreement, or other similar arrangements relating to workspaces, our Commercial Real Estate team would be delighted to speak with you.

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