For decades, they were a familiar fixture on almost every British high street: the engraved brass plaque by the side door, the practice rooms on the first floor above a café, or the converted Victorian townhouse with a small parking space in the rear courtyard. Local accountants and tax advisers were traditionally among the most dependable and down-to-earth commercial tenants in the United Kingdom.
This solid pillar of the regional commercial property market is now rapidly eroding. Great Britain has now lost one in eleven accountancy and tax firms. Ian Gargett, Managing Director at Rapport Digital, warns of the direct consequences of this wave of consolidation: this decline is a serious cause for concern, particularly for landlords of smaller office spaces.
Structural change among small commercial tenants
The loss of over nine percent of these firms hits peripheral locations and secondary market segments in particular. For generations, accountancy firms were regarded as a defensive investment for property owners. They were characterised by low default risks, long-term lease commitments and high location loyalty. This continuity is increasingly breaking down.
Drivers of this shift include ongoing digitalisation processes, corporate mergers and new forms of remote working. Where physical file archives and meeting rooms were once essential on site, smaller satellite offices or entirely decentralised working models are often sufficient today. As a consequence, many practices are relinquishing their traditional premises on the high streets entirely.
Consequences for private and institutional owners
- —Loss of a traditionally creditworthy and reliable tenant group in smaller towns
- —Growing pressure on rental prices for office space above retail units
- —Increasing modernisation and conversion expenditure for older office and townhouse stock
Owners of regional office stock must adapt to a changed demand structure. When traditional professional service providers depart as long-term tenants, this calls for more flexible leasing concepts or structural repurposing of the units concerned. Without strategic adaptation, many of these commercial units face long-term vacancy.
