Investing in Office Space – Challenges and Solutions
By John Skufris, Ray White Commercial South Sydney
Every office market in the country performs differently. For example, strata space in Sydney’s inner city, increased in value by 23.7 per cent over 2016, whereas space in Brisbane’s centre decreased in value by 3.5 per cent. However, there are certain tips, strategies and fundamentals that will help you to get the best out of your investment no matter whatever challenges may arise.
Every office market in the country performs differently.
Find points of difference
When purchasing a commercial property, consider the availability of on-site and nearby amenities that tenants and their staff may be interested in.
These could include proximity to public transport and cafes, availability of building management, meeting rooms, breakout areas and end of trip facilities.
Take the next steps
It may be ideal to speak to an agent familiar with the building and the immediate area. They could assist in providing information including rental evidence to enable owners to effectively negotiate favourable lease terms with new tenants and/or renewed terms with existing tenants.
Throughout the lease term, keep in touch with your tenant and see how they are going. Periodic inspections help to see if the tenancy is over (or under) crowded with staff. Depending on the type of business, this may determine whether they may vacate for more or less space when their lease expires. It is important to plan ahead.
In future we could expect to see a rise in the popularity of flexible working environments.
Future-proof your office investment
Australian Bureau of Statistics data shows that almost a third of all employed persons in the country regularly work remotely – a symptom of a fast-changing business environment. As a result, in future we could expect to see a rise in the popularity of flexible working environments.
If your tenant can inform of their intention to vacate well in advance, you may also be able to engage an agent to advertise for a new tenant earlier. This may reduce the potential of any vacancy period whilst achieving a rate of return which may exceed other types of property.