Maximising the value of your commercial property

While busily focusing on the day to day operations of a business or investment portfolio, commercial property owners often overlook latent opportunities to unlock a property's hidden value, only taking time to consider their property when a problem or issue arises.

Value adding opportunities aren't always evident but can be extremely rewarding, may require minimal capital expenditure relative to the gains brought forward and if outsourced to a third party can require minimal time and resource input from the owner.

Case Study

Recently we were able to increase the value of a client’s industrial premises by over $150,000 during a six month period, by conducting a high level overview, requiring an outlay of only $12,000. Located in Sydney's western suburbs, around half of the premises was being used as business housing for the owner with the remainder being leased to a third party. After thorough evaluation a strata subdivision into two allotments was deemed the highest and best use of the property, and would maximise the value of the property due to the higher rates being achieved in the market for smaller industrial spaces.

This strategy also held several additional advantages for our client, not only creating clearer boundaries for the administration of tenancies, but also greatly increasing the available equity in the property while providing the option to sell down part of the asset at any stage in the future. Consider if any of the following may be applicable in adding value to your commercial property holdings, or your next acquisition:

• Optimising floor space ratios through low cost extensions and additions ensuring the maximum area of the site is utilised.
• Raising the roof levels; especially applicable to older style industrial premises, increasing available racking space and appealing to a wider range of users.
• High impact, low cost aesthetic alterations to modernise the property.
• Potential for leasing unused areas of the property such as rooftops for telecommunication towers and high visibility spaces for signage advertising.
• Strata subdivision.
• Site amalgamation with neighbouring properties.
• Leveraging long term state and local government planning agendas to your advantage by working with authorities on solving known issues, in return for exceptions to other planning restrictions.

Investing a small amount of time into considering your options for value maximisation could result in tangible benefits for you today, and greater opportunities for your property in the future.