I was very interested to read James Townsend’s article (26.02.16) stating that landlords must think creatively when letting space to new start-ups.
Most start-ups, while short of capital, still have massive hopes for the future. If I were a landlord of flexible offices subject to cashflow and valuation restraints, I would take the view of interviewing each of the start-ups and work to a model whereby the start-up could pay less than the market rent, subject to the landlord either taking an equity in the business, which in most cases will only have to be a minimal percentage, or perhaps some high-interest payback if the start-up is still in business one, two or three years down the line.
I think that would be a win/win situation for both parties.
We do want to keep London full of start-ups, some of which will expand to become major businesses with massive investment returns. The gamble would probably be one worth taking for any creative landlord.
Anthony Lorenz, MD, Lorenz Consultancy