Investing in a Commercial Property? Here’s What to Look For
Are you looking to invest in commercial property? It might seem like a challenging time to do so, but there are huge opportunities despite the trying times that we’re in.
So to get the ball rolling, here’s some key considerations about what to look for and how to make your investment count, even in the midst of a pandemic.
There are some seemingly good value office spaces that may look appealing. But it’s important to consider that, with COVID-19 still in effect in Australia and unpredictable lockdowns thrusting people back to work from home at a moment’s notice, there is a lot of unpredictability here. Alternatively properties that support childcare, convenience and industrial sectors continue to be very solid options. These industries are typically deemed essential, so are ‘pandemic proof’ to a certain extent, and properties that support these businesses are typically more flexible than you’re average multi tenanted office building.
It has never been more important to consider and understand independent property market research and trends. While it is near impossible to make perfect predictions especially in this climate, analysing key property data is important to ensure you’re making informed decisions.
Once you’ve figured out what type of property you’re looking to invest in, the next step is location; this is specific to property type, as different types are suited to different locations. If you’re looking in the industrial space, make sure that the property has good access to main roads and truck-accessible transport. If you’re more interested in retail or convenience, how easy is it for the public to see and gain access to the building you’re looking to invest in? If you want to appeal to childcare centres, is the property in a location that is growing in popularity with young families?
The final thing to consider is something specific to the pandemic; density is now of greater importance due to the likelihood of COVID hotspots. Talk to us about how to assess risk in this area, as we understand how tricky this balance can be.
Existing tenants are another good indicator of whether a commercial property is worth investing in. Ideally, you’re looking for a long-standing tenancy and a good relationship between them and the previous owners. These characteristics tend to identify good and continuing business, as well as less risk down the road of tenants vacating. Additionally, happy tenants are typically running stable businesses, and these are the sorts of people and properties you’ll want to invest with.
Opportunity to add value
When investing, it’s important to note whether value can be added to the property that you’re looking to invest in. Buying below market value is one way to do this - this is possible if you’re working with experts who can help you get a handle on market trends, understanding the best time to buy, and other important factors.
Consider the options to renovate, creating space and change the fit out and invest, which are great opportunities to quickly increase the value of the property while also adding potential to increase rent or secure high calibre tenants.
Let us do the hard work
While these tips might help you make a start on your commercial property journey, you’ll get the best results if you work with expert buyers’ agents.
Our experienced team will help you to analyse and understand the latest data, create a personalised risk assessment and help you to feel secure in your business decisions.
Managing Director, Broadway Property
Director, Broadway Property