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The electricity supply can be just as important as the size of the building When viewing an industrial property, investors naturally look at the obvious features. How large is the warehouse? What is the eaves height? Is there a yard? How many loading doors are there? What rent does it produce? But one feature is…
An empty commercial building can start costing money before it earns a penny Vacant commercial property can create some of the most interesting investment opportunities. An empty warehouse, office, shop or industrial unit may offer an investor the chance to refurbish, reposition, divide, re-let or occupy the property. But vacancy also brings costs. One of…
What condition will the building be in when the tenant eventually leaves? When investors purchase a tenanted commercial property, most attention naturally falls on the income. How much rent is being paid? How long is left on the lease? Is the tenant financially strong? But there is another question that can have significant financial consequences:…
A lease expiry isn’t necessarily the end of the income When investors assess a tenanted commercial property, the remaining lease term is usually one of the headline figures. A property may be advertised as having three years, five years or ten years remaining on the lease. But what happens when that lease reaches its contractual…
A fully occupied building today can still become difficult to let tomorrow One of the biggest long-term risks in commercial property is not necessarily falling rents, tenant failure or rising interest rates. It is obsolescence. Commercial property obsolescence occurs when a building becomes less suitable for the businesses that need to occupy it. The property…
Infrastructure can reshape a commercial property market Commercial property investors spend considerable time analysing buildings, tenants, leases and yields. But sometimes the biggest influence on future value is happening outside the property boundary. New roads, transport improvements, major employment sites, logistics infrastructure and regeneration projects can fundamentally change how attractive a commercial location becomes. Better…
The purchase price isn’t the final acquisition cost When investors identify a commercial property opportunity, most calculations begin with the asking price. But the amount agreed with the seller is only part of the money required to complete the acquisition. For commercial property investors in England and Northern Ireland, Stamp Duty Land Tax (SDLT) can…
Ten years remaining on a lease may not mean ten years of guaranteed income A commercial investment may be marketed with an attractive headline: “Let on a 10-year lease producing £60,000 per annum.” At first glance, that sounds like ten years of secured rental income. But what if the tenant has the right to terminate…
The rent roll doesn’t always tell the full story When purchasing a commercial property investment, it is easy to focus on the headline figures: purchase price, annual rent and yield. However, another area can have a significant impact on the actual performance of an investment: the service charge. Service charges are particularly important in multi-let…
Incentives are not always a sign of weakness When people hear that a landlord is offering a rent-free period, they sometimes assume the property must be difficult to let. That is not necessarily the case. Rent-free periods are a common commercial property incentive and can be used strategically to help complete lettings, support tenant fit-out…