For all commercial businesses, one of their main liabilities will relate to the properties that they occupy for the purposes of their business – whether owned outright or occupied under a lease. Where negotiating a lease, the tenant should be seeking to minimise or limit their potential liabilities and to ensure greater flexibility as to what they are permitted to do under the lease.

Many occupiers, particularly retailers and leisure operators, are very experienced in lease negotiations. A number of other businesses, however, do not take leases on a regular basis.

There will be a wide range of operational and practical issues which a tenant needs to consider, ranging from the energy efficiency of a building to the electricity capacity – particularly when a tenant is taking space in quite an old building, it is important to check that the building actually has enough power to cope with the modern 24-hour use which many tenants now require, and the demands of modern IT.

It is always tempting to agree heads of terms quickly when the tenant is under pressure to find new space. However, making sure you agree all the key issues at the outset will ensure that negotiations proceed more quickly and efficiently – it is not just a question of agreeing the rent and the term.

Key issues on heads of terms

• Tenant's break right – Include a tenant's break right at certain points during the lease term (e.g. five years/tenyears) on service of a fixed notice period. You should try very hard to resist the imposition of any other pre-conditions (i.e. compliance with terms in lease), as the wider the conditionality for the break, the greater the chance that the break right could be frustrated where exercised by the tenant
• Additional rent free – Also, you might suggest, where there is a tenant’s break right in the lease, that the lease include an incentive to remain in occupation of the property; e.g. six months rent free post the break date if the break is not exercised
• Service charge – You should (particularly with short-term leases) seek to negotiate a service charge cap that is linked to RPI increases. This will provide greater certainty over expenditure under the lease (or part of it) – and protect against unexpected surprises
• Repair obligation – Try to limit your repair obligation (e.g. no replacement of carpets, etc, or no dilapidations liability). To provide additional certainty, you might want to agree a schedule of condition for the property. The tenant will be required to put the property back into the condition as detailed in the schedule of condition
• Statutory obligations – A lease will normally require the tenant to carry out any works required by any statute or other legal obligations. In the case of a 15-year lease, that may be fine. However, a tenant taking a short-term lease of, say, five years or less, will want to limit their potential liability to undertake works which statute may require going forward
• Underlettings – Depending on the nature and size of the property, you should consider whether it would be possible to underlet parts of the property to separate occupiers, and, if so, on what basis. Your need for space may change over time, and the ability to underlet the whole or parts of the property may significantly assist cash flow in the future

This article first appeared in Law-Now, CMS Cameron McKenna's free online information service, and has been reproduced with their permission. For more information, go to www.law-now.com

Following the closure of the Government Office for London, the Government has announced its intention to close down all eight government offices in the English regions.

The offices, which cover the East, South East, South West, East Midlands, West Midlands, North West, Yorkshire and the Humber, and the North East, are responsible for representing central government in the regions and feeding back local views to Whitehall.

Commenting on the decision to abolish the offices, Communities and Local Government secretary Eric Pickles described them as "agents of Whitehall to intervene and interfere in localities."

Final decisions on the closures will be made during the autumn spending review. Mr Pickles said the Government would do its best to avoid compulsory redundancies. 

Medium-sized cities like Exeter, Ipswich and Norwich are important 'nodes' within the national economy and should work with each other and larger neighbours to drive economic recovery across the UK, claims a new report from The Work Foundation.

Commissioned jointly by the three cities, the report, Recession, Recovery and Medium-sized Cities, shows how the recession has played out differently in the 49 English medium-sized cities, according to differing levels of workforce skills and industrial profiles. Focusing on the actions being undertaken in these cities to respond to the recession, it shows how medium-sized cities are taking decisive action to support struggling businesses, the newly unemployed and young people trying to find work. It also reveals how these cities can contribute to economic recovery.

Economic growth over the past decade has largely been concentrated in the UK's largest cities, and this looks set to continue. Among medium-sized cities, the picture is more uneven: many accounted for a smaller share of regional productivity (Gross Value Added*) in 2006 than in 1995. Nonetheless, over the same period of time, regional employment in the private-sector knowledge-intensive services (such as business and high-tech services) that are set to expand and drive growth over the next decade has grown in the majority of medium-sized cities. This creates key opportunities for such cities in the upturn.

Naomi Clayton, report author and researcher from the Ideopolis Programme at The Work Foundation said, "Medium-sized cities are responding well to the challenges created by the recession and are undertaking important local initiatives to attract business, boost skills and promote regeneration and recovery. Over the next decade, it will be private-sector knowledge-intensive services that create the majority of new jobs and generate the highest productivity gains. Medium-sized cities are, therefore, well positioned to play a key role, working with each other and with their larger neighbours in driving regional and national recovery."

The report's four recommendations show how medium-sized cities can help drive the recovery:

• Through concerted investment in economic development and regeneration, working closely with neighbouring large cities (where possible), with other medium-sized cities and with their surrounding sub-regions to maximise competitiveness
• By developing strong civic leadership across private, public and third sectors, working towards a clear long-term vision of sustainable economic success that takes account of its distinctive assets, such as universities, industrial composition and quality of place
• Investing to increase workforce skills and to stimulate local employer demand for higher levels of skills
• By creating an economic development strategy that responds to the changes in the economy and seeks to attract and grow private-sector knowledge-intensive services firms, jobs and individuals, as well as develop sectors such as retail, leisure and tourism to provide high-quality employment for those at all skills levels

Recession, Recovery and Medium-sized Cities is available at www.theworkfoundation.com

* Gross Value Added (GVA) measures the contribution to a local, regional or national economy of each individual producer, industry or sector in that area. It is used in the estimation of Gross Domestic Product (GDP), a key indicator of the state of the whole economy.

As the row over the recent government decision to allow a third runway at Heathrow rumbles on, London mayor Boris Johnson has put forward ambitious proposals for a new £40 billion airport spanning the Thames estuary, with runways on two separate islands.

Cities Outlook 2009, from research and policy institute the Centre for Cities, pinpoints the UK cities most exposed to the effects of the recession and least well placed to weather job losses and business closures during the coming year.

Below is a summary of the key Regeneration Projects and Development Sites, provided by the Welsh Assembly Government.  

Despite the present economic picture, there is good news for some parts of the UK, which look set to grow increasingly popular as relocation destinations. In the first of a series of articles, we take an overview of the current situation - with a look at the factors that influence decision-makers.

Predicting relocation hotspots is particularly difficult in the current climate. However, those patterns that have already evolved give us some idea of where regional growth is likely to occur. You would imagine the clustering of relocation companies and destination service providers would give a good indication of where the majority of relocations are centred. However, the positioning of relocation management companies (RMCs) is probably historic. Over the years, companies have merged, been taken over and disappeared, and new players have entered the scene. Global influences and technology mean that relocation companies don't necessarily have to be at the heart of their major moves, but infrastructures such as roads, railways and airports are still vital for communication, and their positioning reflects where clusters of large corporates are based.