Improve the value of your commercial property

If you own a commercial investment property you should be constantly thinking about ways of improving its income, occupancy and capital value.

By adopting a strategic approach, all of your decisions should be made with a view to adding-value to your investment property over time. Consideration should be given to enhancing your property’s net income, which in turn increases the value of the property.

Some key issue to consider:

  • Ensure that you are receiving the current fair market rental for the property. Many commercial office properties are underlet, which directly impacts the value of the property.

  • Future-proof your property – a property with a strong sustainable tenant, paying market rent, with a reasonable term lease, will always be saleable to another investor, if you decide to sell the property in the future.

  • Make sure that your tenant is the right tenant. Be very careful in selecting the most appropriate tenant, preferably with a solid business history. Also, take into consideration the surrounding tenant mix (particularly retail and medical properties). This will have a bearing on the success of the tenant.

  • Make sure that the property is well maintained and presents well.

  • Monitor lease expiry dates, rent review dates, and option exercise dates to ensure you are aware of the key dates. This allows time to undertake market research, or if the tenant decides to vacant, initiate a leasing campaign, so as not to have any rental down time, or vacant premises.

  • Undertake regular inspections of the property and meetings with the tenant.

  • Many property investors do not have the time, or market knowledge to effectively manage a commercial property in accordance with the lease provisions.

  • For example, a qualified professional conducting a market rent review and obtaining a $5,000 p.a. increase in rental, may result in $75,000 to $100,000 in added value to the property.

  • Appoint a good commercial property manager, who is up to date with the various legislative changes that may affect your property.

  • In some cases a tenant may want to upgrade, or refurbish the premises. This may be a good opportunity to negotiate a new lease term and rental structure. This is dependent on who is undertaking and paying for the upgrade, or refurbishment works. A Heads of Agreement documenting the arrangement is vital, prior to any work being commissioned, or entering into a new lease agreement. This sets out clearly the obligations of each party.

CONCLUSION

If you want to add value to your property, then now is a great time to plan the strategy, to ensure the best outcome for your investment property. How do you take time out of running a business to do all this as well? Wouldn’t you like an expert to do it for you?

Call the Intercommercial Property Group. They will provide advice, market research and financial modelling, to save time and money, and reduce risk. This will give you peace of mind, and the confidence to make an informed decision.

We specialise in office, industrial, retail and healthcare property.

Feel free to call me on 0418 129 299 for a brief chat, to obtain a market update, and discuss your property requirement.

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