We look at why now is a good time for landlords to refurbish their commercial property.
It’s an interesting time at the moment for the commercial property market. Economic uncertainty has resulted in a hesitation for investors to build new spaces, yet demand is increasing. As a result, the price per square foot of office space is rising, and a lack of available space, particularly in areas like Manchester, has created a market driven by property owners and landlords.
With this in mind, the question of refurbishment is heavy with many landlords. Is it worth the investment when the economy is uncertain, and the space might find tenants regardless? We look at the benefits of landlord refurbishment and why now is a good time to do it:
Across the country, there are examples of refurbished workspaces commanding rents close to that of new build properties. Property costs are one of the biggest overheads for a business, so by refurbishing your property, you can ensure it’s a place that your tenants will be seeing a solid return on investment. Tenants are often prepared to pay more for an office that requires them to spend less time and money updating facilities themselves.
Let Space Quicker
If you commit a vacant office to a refurbishment, how can you be confident that delivery will be on time, so the space is available again to let? It can seem like a gamble but working with an established and experienced contractor who can verify their lead times is the best way to have confidence in the process. By investing in quality materials and workmanship, potential tenants will be attracted by the professional finish of the property as well as your commitment as a landlord to maintain a quality experience.
The Status Quo
Some landlords worry that refurbishing their building could disrupt the status quo and disturb existing tenants. The best way to take advantage of refurbishing select floors in-situ, is to make sure your contractor is able to put processes in place to minimise disruptions to surrounding tenants and occupiers. Most tenants will be pleased to have updated facilities, but keep communication open so there are no nasty surprises if the rent will increase as a result.
Environmental considerations are hot on most tenant’s agendas. Increasingly, businesses are choosing to taking up BREEAM or SKA accreditations to demonstrate the importance of sustainability in their office fit out. By investing in an energy efficient M&E infrastructure, landlords can make those accreditations easier to achieve or simply improve EPC ratings, which can influence a tenants decision to take up the space, and also increase the value of the property.
It's Your Investment
The sum of all these part is ultimately a good return on investment. A refurbished office, ideally with improved energy efficiency is going to be more desirable to potential tenants and command a higher rental yield. Demonstrating your commitment to the value of your property is mirrored as a commitment your tenants - which will promote long term tenancies, avoiding the any vacancies down the line.