If you’re the owner of commercial property, then you will understand that it is a long-term investment and, as a result, brings you year-on-year returns on investment. But, there are still some ways in which you can increase and add value to your commercial property.
A lot of commercial property owners are responsible for buildings and properties which, over time, have become tired and dated. However, there are some simple and easy ways in which you can add value to your commercial property and increase the revenue generated.
The commercial property market in the UK is one which is constantly evolving and changing and commercial property owners continue to face unprecedented challenges which are involved with being a property owner. Reducing your operational costs and adding value to your commercial property can all contribute to maximising on your investment. Let’s take a look at 3 ways that you can add value to your commercial property.
Any commercial property agent will tell you that having an EPC certificate can add value to your commercial property. An energy performance certificate (or EPC) aims to give you an overview of the energy performance of your property, as well as recommendations on how you can improve the energy efficiency of your property. Securing an EPC is a great place for you to start if you are looking for ways in which you can increase your property value. Following an EPC assessment, your property will be given a rating between A-G, with A being the most energy efficient, and G being the least.
Following the implementation of the MEES (minimum energy efficiency standards) in April 2018, this means that commercial property owners can’t renew or let a lease for their property if the EPC rating is F or G. Properties with an EPC rating of F or below are required to complete work in order to improve the energy efficiency of the building. With MEES, commercial property owners are expected to contribute up to £3,500 towards improving the energy rating and efficiency.
This might seem a lot, but the Government predicts that with this figure, the costs should be quickly recovered through other cost-saving measures. By completing energy efficiency improvements, this can reduce your overall overheads and this, in turn, should add value to your commercial property.
One of the easiest and fastest ways to increase the value of your commercial properties to increase the rent payments from your tenants. The rents which your tenants pay have a huge impact on the overall value of commercial property, but to start with, you will need to do some market research. Review current rental markets in order to determine the average amount for your property and then increase rents accordingly if you find that there is any room for increases.
You can look to increase the rent over time for pre-existing tenants, but it is also important to avoid pricing yourself out of the market. This is a certain way for you to lose tenants and revenue. Instead, if you find that you have room to increase and are able to increase the rental cost for your space, then the overall value of your property will increase as well.
There are different types of improvements which you can make to your commercial property, but some will add more value to your property than others. Cosmetic improvements are quicker to make and improve the day-to-day appearance of your property, however substantial structural improvements will likely largely increase the commercial value of your property in the long run.
It’s important that, if you do plan on making improvements to your commercial property, you get an independent third party to carry out the assessments for you. Aesthetic improvements, which could include a fresh coat of paint or the addition of new decor pieces, can go a huge way in refreshing your property. Structural or major improvements, such as updating outdated areas, landscaping or adding modern amenities can often be the deciding factor for signing new tenants.
When considering selling your commercial property, it is important you don’t do this through an estate agent. The reason for this is that there are many additional fees which have to be paid such as service fees and value added tax (VAT). If you have the time, do the sale of the property yourself so you can maximise your profits.
During this time of economic uncertainty, it is now more important than ever for businesses to look at reducing operating expenses and adding further revenue to their bottom line. There are many different ways in which commercial property owners can add value to their commercial property, therefore further maximising their ROI.
