The Royal Institute of Chartered Surveyors has reported a growing demand for business premises across the country (RICS Commercial Market Survey Q2 2013).
As many organisations start to consider the possibility of acquiring new commercial property, The Business Exchange talks to Chartered Surveyor Edward Preece about how best to approach a commercial property acquisition.
“It’s worth investing time at the outset to clearly assess the key elements required of a new building and to place these in order of importance” advises Ed, whose firm Edward Preece & Co has been advising businesses on commercial property matters since 2004. “This can save both time and potentially costly mistakes further down the line”.
For many companies, a relocation offers a fresh opportunity to occupy a building which best matches their preferred operational and office layout. Analysis of the way their existing building is used and occupied, with emphasis on staff numbers and equipment requirements, will help provide the raw data to which expansion and growth expectation rates can be applied.
This rate of expansion will typically be based on the company’s financial forecasting for the business over a 5 – 10 year plan.
The next step is to decide at which point on the growth curve the business should seek to establish its optimum building size. Too early and the building is outgrown too soon, too late and the business is carrying unnecessary overheads.
Property costs are directly attributable to the size of the building, with most expenses – purchase- price/ annual rent, business rates , fit-out costs, and all aspects of building running costs e.g. heating, cooling, cleaning, maintenance etc. – considered and benchmarked on a square foot/meter basis. Getting the size wrong has material financial implications. The other key considerations include location, building profile, IT connectivity, parking, timescales, and budget. These need to be placed in order of importance to ensure a clear focus throughout the search and acquisition process. The length of the daily commute for the MD is of course important, but perhaps not as important as some of the other criteria!
As Ed concludes “Undertaking the necessary review and preparation will not guarantee you the perfect building but it will ensure that if compromises need to be made, these are based on a clear understanding as to what is required from your new building.”
A full version of ‘Property Acquisition Guide – Preparing the Brief’ can be found at www.edwardpreece.co.uk.