• Broadway Property team

How to adapt your commercial property strategy

You had your commercial property set in stone. Then COVID-19 hit, and everything changed. What now?

COVID-19 has shaken up everyone's plans, including commercial property owners and tenants. If commercial property has a big influence on your business and wealth, you need to be agile and adapt. Here’s some key considerations as you adjust your commercial property strategy.


Before you do anything you need to understand the facts. Consider where you are at, what your immediate concerns are and how the current challenge changes your future plans. The general challenge for commercial property owners will be to maximise cashflow and minimise vacancies. To best combat these concerns as a commercial property owner, you should also be assessing which of your tenancies are going to be most impacted and for how long. The earlier and more frequently you communicate with your tenants during these times, the more successful you’ll be in devising payment strategies and developing a suitable outcome for both the landlord and tenant. If you have any upcoming leases expiring, consider the best way forward and how you will approach this with your tenant. Is it more important and beneficial for you to structure a deal that will help you keep your tenants for the long-term, or is the property or relationship no longer a fit and it is best to part ways? Just remember that a Code of Conduct is in place during the COVID-19 period, so make sure you are adhering the principles, depending on where your tenant's business is at. For tenants, it is all about retaining maximum cashflow to keep the business going while maintaining the tenancy. You need to understand your business needs and challenges in the next six to 12 months, and how the various scenarios will impact your tenancy and ability to pay rent. In this process, both landlords and tenants should be communicating openly and frequently about their situation, which will enable both parties to understand their position and work together in order to find a way forward.

What needs to change?

As a commercial property owner, first and foremost, consider if retaining your tenants is going to be a challenge and whether you need to renegotiate. In light of the recent Mandatory Code of Conduct announced by the Australian Government, enter into honest and open conversations with your tenants as soon as possible to negotiate a suitable rent payment plan for both parties. Maintaining positive relationships with your tenants will be key to upholding long-term tenancy and maximising your cash flow in the short and long term. If you reach a stage where your tenant can no longer remain in your property, consider any make good works that need to be performed and whether you need to repurpose your commercial properties for new tenants. Repurposing your commercial property should always be considered as part of your strategy, especially during the process of securing new tenants, but you also need to consider how a global pandemic may change the way people work in the medium to long term. Smart commercial property owners and investors should also build in flexibility and room to move in their strategies – as we’ve learned, market conditions can be hard to predict. As a commercial property tenant, assess the impact COVID-19 has had on your business and its short-term and long-term growth. You may have reached a point where your tenancy is no longer fit for purpose. Again, ensure you enter these discussions early with your landlord and be sure to demonstrate transparency and empathy to your landlords circumstances at all times. But remember, any changes and decisions you make (both as an owner and tenant) during these uncertain times could have a permanent and long term impact. So it is important to get expert advice, maximise your relationships and cash flow, keep a cool head and try and consider the future beyond the immediate challenge.


As a commercial property owner there are opportunities in this market for investors looking to expand or diversify their portfolio. The industrial property sector is booming in various areas, including logistics and distribution spaces. With Australian manufacturers making a comeback and retailers making the move to online shopping, there is a greater demand for properties that suit these needs. And it doesn’t look like this demand will drop any time soon. This, coupled with record low interest rates and the willingness of the banks to lend on commercial real estate purchases, provides well-positioned investors with the chance to advance in adversity.

Australia’s property market is still regarded as a great, low risk option for investors, and let’s not forget that this crisis will not last forever.

As a commercial property tenant consider if you can use your space more efficiently or differently. Maybe now is the time to analyse your business needs and decide whether you require a new fitout to optimise the use of your company’s space. With the help of a tenant representative, you could reduce lease occupancy costs while upholding the same level of productivity and efficiency within your business. Furthermore, if you have been forced to repurpose your business to generate new cash-flow and remain open during these strict times, consider the best way to repurpose the space you have to accommodate this. Again, this is also a chance to sit down with your landlord and negotiate more flexibility from your lease if you are in a grave financial situation. Securing a tenant representative will ensure you maximise all opportunities within your commercial property strategy.

Get advice

When it comes to commercial property strategy for both commercial property owners and tenants, it is important to seek advice from experts. Broadway Property works closely with investors, buyers and tenants to help them develop a strategy and achieve their goals, even in tough times. Contact us to discuss your needs. No obligations. Ben Heritage Managing Director, Broadway Property Email me Ryan Stewart Director, Broadway Property Email me