It is a well-known fact that COVID-19 has affected commercial property values all over the world, including Malta. Many companies leasing Class 4A offices during COVID-19 started introducing flexible work, whereby employees could also work from home. This in turn resulted in owners requiring fewer square metres to house their staff, resulting in a larger supply of office spaces on the market. 

In Malta, highly sought-after areas which offered high spec office space, such as Tigné in Sliema, Balluta Bay, Pender Gardens and Portomaso in St Julian’s, managed to keep their values stable due to high demand and low supply, while offices in different areas did suffer a 20 to 25 per cent reduction in the quoted prices per square metre. 

Perry Ltd currently has a large selection of offices to lease, ranging from €100 per square metre to over €400 per square metre. Perry Ltd currently also has a selection of offices for sale in Sliema, Valletta, St Julian’s and Mrieħel. 

In contrast to the offices sector, the warehousing sector Class 6A remains robust. There is generally a high demand for good warehouses with a low supply. From our experience at Perry Ltd, centrally located warehouses, having a minimum of five to six metres height, and which are located on the ground floor, with easy accessibility for the loading and unloading of trailers and containers, lease at between €85 and up to €110 per square metre. 

We also have warehouses which lease at an average of €60 to €65 per square metre, especially when these warehouses have multiple floors, and the other floors need to be accessed via good lifts. Therefore, the norm is a higher rate for warehousing space on the ground floor and a lower rate – almost half the ground floor rate – for levels which are in the basement or on higher levels. 

The rental rates of showrooms and retail outlets (Class 4B) decreased marginally in 2020 due to pandemic-related issues. However, with the relaxing of the restrictions in 2021, well-located showrooms are once again fetching rates in the range of €180 to €200 per square metre. This rate depends on the availability of parking, the location of the showroom, internal heights and its visibility when one considers its glass display windows. In my opinion, showrooms located in central areas, just off main arterial roads and having dedicated parking fetch higher rental rates. 

With regards to catering establishments, demand for cafeterias (Class 4C) and restaurants (Class 4D) in highly sought-after areas such as Valletta, Sliema and St Julian’s remains high. The price per square metre varies according to the location, the number of covers inside and outside, and the measurements of the kitchen as well as the bar area. 

We highly recommend that all terms and conditions are negotiated and not just the rental price of the property. 

Importance is usually given to: the initial rent-free term which is usually requested for setting up; the yearly increase in rent, with the norm being between two and three per cent per annum; the inclusion (if any) of kitchen equipment; and, most importantly, the checking of all Planning Authority and Malta Tourism Authority permits.

When one considers rates per square metres of both hotels (Class 3B) and guest houses and boutique hotels (Class 3A), leasing rates vary depending on the location, amenities, classification and overall finishing of the commercial property. 

Rates are usually higher in locations such as St Julian’s, Valletta and the Three Cities and are usually lower in areas such as Buġibba, Sliema (especially without sea views) and Gżira. However, we have had cases whereby we rented a guest house at a higher rate in Gżira since it was very well finished, while similar premises in St Julian’s were rented at a lower rate due to ongoing works close to the property and other issues. 

Perry Commercial Hub offers a good selection of hotels and guest houses both for lease and for sale on its extensive database. We also have a limited selection of commercial properties which are suitable for schools, nurseries or day centres (Class 2C). The price per square metre varies according to the location and the size of the open spaces within the premises, as well as the availability of parking. 

Furthermore, a selection of commercial properties which are suitable for gyms (Class 3C) are also available. It should be noted that the rates per square metre for these types of properties depend on the availability of parking within the premises. 

We are currently offering our clients a free quotation on all commercial property valuations to ascertain the real value their commercial property can fetch post-COVID-19.

The team at Perry Commercial Hub provide investment and professional consultancy services across core commercial sectors including offices, retail, catering, schools/nurseries warehouses/logistics, industrial/factories and hotels. Contact them on 2131 0800 or send an e-mail to perry@perry.com.mt for a professional consultancy.