Buying commercial property is serious business. If you’re going to invest your hard earned dollars into purchasing a warehouse or industrial property, you want to make sure you’re making the right choice. Are you a business owner looking to buy or invest in commercial property? If so, there are many things you need to consider as part of your selection process. Here are 10 things to look out for when buying commercial property to help make the process a painless one, and to ensure you find the best property to suit your needs…
- Location, Location, Location
It almost goes without saying, but location is the number one criteria for buying commercial property. Priorities will vary according to which industry you’re in, but consider things such as the distance from the CBD and the airport, access to major transport routes, and the demographics of the suburb where the property is located. If you’re looking for demographic information, local councils are a wealth of knowledge. Alternatively, you can access the latest statistics on the Australian Bureau of Statistics website.
Parking is important. Your employees (or your tenants’ employees) need easy access to parking and, no doubt, so do your customers. Depending on your industry, you’re likely to also need adequate temporary parking space, as well as sufficient space for incoming and outgoing freight. Additionally, it’s worth keeping in mind that parking is a major consideration when applying for local government approvals to use your property for particular purposes.
It’s important to check out the zoning around the property you’re inspecting, to ensure it matches up with your intended usage. The Victorian Government’s Land Channel website provides access to maps detailing zonings and overlays across the state. It also provides a range of other resources such as property and land titles that are sure to be helpful. We always recommend you consult with an independent town planner to ensure your intended usage is adequate prior to making an offer to purchase.
- Yard/ Hardstand
Are you looking to purchase an investment property? When it comes to leasing, we’re finding properties containing a higher proportion of yard space are highly sought after compared to properties with little or no yard space. These particular properties may be difficult to find due to modern developers maximising the building area for their new developments.
- Opportunity for future expansion
A commercial property may meet the needs of your business today, but what about tomorrow? Looking at the potential opportunities for expansion of the property is an important consideration as part of the purchase process.
- Energy efficiency & environmental factors
With rising utility expenses nationwide, energy efficiency and running costs have become an even more important aspect of the modern business world. Does the property have solar? Is there an opportunity to add solar panels to increase energy efficiency?Depending on the nature of your business, there might also be other environmental factors you need to consider. Where will you be accessing your water from? Are emissions or sound restrictions an issue? Check the Victorian Environmental Protection Agency website for details and information about other potential factors.
- Due diligence
Of course, due diligence is required in the purchase of any property and you can actually make your purchase proposal/offer subject to satisfactory due diligence. Arrange a building inspection by a qualified expert to identify any defects or potential issues for you that could cause grief down the track. Ensure all council building approvals have been obtained, check out the wiring and any electrical issues, and ensure no hazardous materials are on-site.You should also check drainage and sewerage diagrams, fire safety issues (if any) and investigate if any heritage or building restrictions apply to the property. If you have reason to believe the property may have contamination issues, then it’s also worthwhile to obtain an environmental/contamination report.
- Major projects happening in the area
Check to see what’s happening in the area around the premises. Is there other development happening in the suburb? What about any new community infrastructure being built? New major projects in the area can be an indicator of economic growth in the suburb, which may be a positive for your business. If you’re looking for an investment property, we are finding that developed areas usually lease much more quickly. They also typically demand higher rent returns compared to undeveloped areas.
- Inclusions in the purchase price
Ensure you’re aware of all things included (and excluded) from the purchase price. Is there any commercial furniture or industrial equipment included? If not, have you factored this into your refit budget?
- Current use of the property
Is the property currently leased? What agreements are in place? What is the plan for the tenants once you purchase the property? If you’re purchasing the property as a tenanted investment and there’s a current lease in place, be sure to check the current lease terms, as well as rental lease options and increases, and market reviews. Finally check the security you need to ensure your investment is secure. For example, security bonds, personal guarantees, bank guarantees and tangible guarantees.
If you’re in the market for commercial or industrial real estate, we highly recommend you speak with a real estate agent that specialises in the field. Proact Commercial works exclusively in commercial property services. We can help you to find that retail shop, office space, bulky goods showroom, display yard or industrial property, that you’ve been looking for. Contact us on 1300 590 585 or you can check out the properties currently available on our website: https://www.proactcommercial.com/