As a commercial landlord, the value attributed to your property is key to the ongoing health of the investment. It is one thing to maintain that value and retain a consistent and lucrative income from a property, but it is quite another to increase that value. So other than a major redevelopment or a lengthy change of use process, what simple steps could you take to add value to your commercial property?
The key to optimising the profitability of a property is through the income that it generates. In this way, income needs to be sustainable. Since the ongoing return of your property is down to your tenant, it is clearly desirable to attract a tenant with one or all of these attributes:
- Proven turnover
- Long-stay potential
- High profile brand
The capital value of your bricks and mortar becomes important when you come to sell the property. This may feel like an event so far in the future that it appears incomprehensible to consider it now. However, ongoing maintenance of a property will pay dividends when it comes to a future sale. With a busy schedule, small maintenance issues can be overlooked. It is for this reason that employing a commercial property manager such as Curchod & Co to ensure that minor repair issues are solved in a timely manner will have a direct impact on the future capital value of your property.
Structural and Cosmetic Refit
This is one of the clearest ways to add value. Updating the appearance of your building, inside and out, takes a cash injection. Done right, your investment will benefit. In addition, adding or improving facilities such as air conditioning, utilities and tech capability can attract a high quality tenant.
When the value of a property is impacted by its profitability, reducing your expenses is key. Aspects such as electricity and utilities can be reduced by analysing use and changing suppliers. Alternatively, making changes to your property to improve its energy consumption such as LED lighting or improved insulation is a great long term move.
This can mean physical or contractual security. A property is more attractive to a tenant if it carries reliable and strong security systems, such as pass card entry and security cameras. This is especially so if you are letting space to a tenant whose contents will hold considerable value such as technology firms. In addition, it is important for both landlord and tenant to feel secure in their lease contract. Our experienced contractual negotiators ensure that both parties feel confident in their lease agreement.
Vacant properties detract from your ongoing regular income and will also impact your potential rental sums and even the capital value of the site. When your property is marketed and managed by a good property agent, such as Curchod & Co, the time between tenants is minimised. Ongoing relationships are maintained so that when the end of a lease is approaching, the lease renewal process can be managed in a seamless way.
Layout is vital here. By assessing the internal and external layouts of your commercial property, you may find that there is more lettable space than you had anticipated. Could an office space accommodate an organisation with a larger headcount if laid out differently? Could you offer additional car parking capacity for prospective tenants? Could your site offer added facilities to attract a high quality tenant; such as cycle parking, recycling or fitness facilities?
Many methods of increasing the value of a commercial property appear at first glance quite subtle. Making changes to aspects of the building which can have a long term benefit requires experience and knowledge. This is why a commercial property manager or agent is so well placed to identify and undertake these changes. With the contacts and experience from which Curchod and Co benefit, we are able to optimise the value of our landlords’ investments.