The property industry in the UK has been regaining lost ground and is slowly recovering from a long global recession and while the signs of growth are slow, they are promising.
Something that has come to light recently has been the increased demand for property management services and not just in London, where values remain considerably higher than the rest of the regions.
So why are owners keen to contract property management functions to a third party? There may be several reasons including:-
- More businesses regard rental properties as the long term prospect for their organisation perhaps due to stricter lending criteria and need for larger deposits, which is restricting demand for freehold ownership. This has led to an increase in demand for rental properties which in turn has boosted expectations for property standards and maintenance.
- The legislation surrounding lettings, rentals and health and safety regulations is increasingly lengthy, complex and complicated. Landlords would rather have experts attend to such matters and this is where commercial property experts and advisors come in. They are there to ensure that the interests of their clients and that of their tenants are properly looked after.
- Tenants themselves can also contract out the management functions if their buildings to firms providing facilities management functions.
Property management services actually encompass many services, not only rent, insurance and service charge collection but can include day to day running and operational handling of the property, safety inspections, 24 hour call out maintenance and service and utilities management. At the same time the management of the property on behalf of a landlord can and should include advice on how to improve rental income and capital appreciation.
Having a property managed by professionals can greatly improve the asset performance of a commercial property investment. Call Barker Storey Matthews for an initial consultation.
Commercial property is a property which is rented or leased to businesses and typically falls into a number of categories including offices, industrial or warehouse buildings or retail shops and warehouses. The Use Classes Order 2005 tables various uses into groups; Uses A1-A2 deal with most “retail uses, A3-A5 food and drink uses such as takeaways, restaurants and pubs whilst Uses B1 to B8 deal with a whole variety of business use from offices (B1) to warehouses, manufacturing uses and special heavy industrial processes
Rents for commercial property can vary dramatically depending on a number of factors including
- Overall specification of the space
As well as these factors, rent can be affected by how long a tenant is prepared to rent the space for. A flexible lease with options to break the agreement will invariably mean that the rent will be much higher than if an occupier agrees to lease a property for say 10 or 15 years. The longer the lease the more the financial incentives are – subject of course to the tenant demonstrating that they have a business that can afford the rent in the first place !
If you are considering taking a lease on commercial property then first thing you should consider is to appoint or liaise with a commercial property agent or chartered surveyor who can advise in terms of the best deal for you. Specialist Chartered Surveyors are able to advise on condition of commercial property as well as advise on terms appropriate for the premises you are considering.
Rent as well as price should account for the cost of any repairs !
As a retailer, selecting the right size of retail property is often important in terms of corporate fit; you know the format, standard cost of fitting out, how many staff to recruit and the likely volume of sales generated from a certain trading area. As important, if not critical is the location.
From the outset, a poor location will mean poor sales. So, how exactly do you select a good location for a retail property?
- Understand your audience and target market.
- What age group are you catering to?
- Do your customers live near that area?
- Do your customers walk or drive to your property. If they will be driving, is there enough parking near the retail property location?
If you are looking for a retail property then you can assess how other retailers are currently trading. You may already have contacts in the retail trade and they might give you some valuable information about the area and an insight into spending habits of the local community.
Assess your competition in the particular area too. If it exists then you will have to rework your strategy to see how you can attract business towards your retail property. Analyse how tough the competition really is and if the competition is too fierce and you do not provide unique offer then are you better off going elsewhere?
If you are inexperienced in making location decisions and negotiations then you should contact a specialist commercial property agent or chartered surveyor with retail expertise, who can point you in the right direction, help you locate the best retail property for your business and then advise on the most appropriate terms of the lease for the property in question.