Commercial property is a staple of every region. Even with growing online presences, a lot of organisations still need a physical location to operate, whether that’s an office for staff to work from, or a retail venue for customers to visit. With so many different types of business and needs to fulfil, you can count on commercial properties to meet all every demand an organisation has.
The commercial property you choose for your business depends on a range of considerations, such as location, size, function, and accessibility as well as price. We want to start this piece by emphasising that just because a property is cheaper, it doesn’t mean that’s the best choice for the future of your business.
You should definitely keep the price in mind, but other factors could outweigh the cost, which is why there’s no one solution for everyone. It all depends on your needs and what your future forecasts predict.
What Determines The Price Of A Commercial Property?
While there’s plenty of choice when it comes to commercial property, not everything is even when considering their price. There are a lot of factors that have an impact on commercial property prices, such as location, size, use, and even how much demand there is for each space.
Different parts of the country also bring changes in price, with some locations being more valuable than others. To give you a better understanding of what you can expect when looking for a new commercial property, the experts at Williams Sillitoe are here to explain how these factors change the prices of each property you’re considering.
It’s important to remember, however, that just because there’s a cheaper option available doesn’t mean it’s the one you should choose.
The Location Of The Property
One of the biggest factors in determining the price of a commercial property is the location it’s in. On a broad scale, where you look across the country will change the price, with properties in London, for example, being far more expensive than in Manchester or Cheshire.
The country’s capital is a prime location, and that makes space even more valuable. With such large markets to attract, the potential gains are huge, increasing demand and commercial property price.
Even in other cities, you’ll find locations closer to the centre or in business districts more expensive than rural properties, too. This gives business owners plenty of choice when it comes to finding the right location that suits their needs. Amenities, access routes, new developments, and more can all play a part, as well.
How A Commercial Property Is Used
What you plan to use the commercial property for also plays a part in determining the price. Some businesses are more profitable than others, and some require space to seat customers – like a restaurant, for example, compared to a warehouse or office.
While some venues are multi-purpose and can be adapted to any number of businesses, others are designed with a specific use in mind. This incorporates the return expected from a rental or sale, and will have a direct impact on the commercial property’s price.
The Size Of The Property
As you might expect, the price of a commercial property varies depending on how big it is, too. This has a direct influence on how many employees a business can employ, and how many customers can be present at one time. A larger venue offers the chance for an organisation to make more money, and will often be more expensive as a result.
However, with larger buildings, there’s also the option to sell or lease out smaller, individual units to more businesses. This means the property becomes even more valuable, as there’s a greater return on any investment, whether operating from the building or leasing it out.
The Demand For Commercial Property
Another factor that helps set the price of a commercial property is how much demand there is. When a lot of organisations are looking to set up shop, it allows building owners to charge higher prices to get the best return possible. Especially in areas where there is high footfall or a lot of competition, it’s a good indication of what’s needed to be successful in that area.
When there’s less demand, it gives the buyer or renter a stronger position to negotiate on the price they pay, as it’s better for the business owner to have a tenant in place than not, so both parties can use this to their advantage depending on the situation.
The Condition Of The Property
What state the property is in will also affect the price. If a lot of work needs to be done to make the commercial property usable, then it’s going to be harder to sell – or rent – at a higher price. If the building is in excellent condition, then there’s less money that needs to be spent to start running the business from it.
This shouldn’t reflect any costs the business in question needs to spend to set up, such as equipment or decor – the price is affected by structural, security, and safety factors more than anything else.
What Makes Commercial Property Good Value?
While good value on a commercial property varies from location to location, and business to business, there are some ways to make sure you get the best value and the right property for your needs. This also depends on the position you’re in.
The Best Commercial Property For Sale
When it comes to finding commercial property for sale, you need to consider not just the price but the state of the building you’re thinking of purchasing. The process takes more time to complete and is an indication that you’ve found the place you want to operate from for years to come, so make sure it’s right.
Having room to expand becomes more difficult when you own the building – unless you’re prepared to invest heavily, and can get permission to do the work needed. Keep an eye on how the area is developing, and what might come in the future, too. You can’t control everything, but a lot of work can take time and there will be signs of what to come if you look closely enough. Make the wrong choice and it could put you in a tough position for a long time.
Finding Good Commercial Property For Rent
A business will choose commercial property for rent based on the price they pay to the building owner each month or year, but that’s only one part of it. While you don’t want to pay too much, you should think about what the area has to offer. If there are a lot of businesses or office workers nearby, a retail or food business can do well, as one example. This lets you fill a hole and provide a service people need.
Another consideration is planning for the future. A lot of leases will be for a set amount of time, and if you don’t plan ahead well, you will pick a property that is too big for you to fill, or too small to effectively run your business from. This can hamper you over the time you’re in the commercial property.
How Do You Know Which Commercial Property To Choose?
Businesses operate on very fine margins in a lot of cases, which means owners are always looking for the best value to help reduce costs and maximise profits. It’s a smart approach, but choosing the cheapest option isn’t always the best idea.
A more expensive commercial property in a better location, where it’s easier for customers to reach you, or that has parking, can be a much better proposition depending on where your audience is coming from, for example. An office that is easy to get to, and has plenty of nearby amenities for your staff, clients and visitors can also make it easier to attract staff.
Finding a gap in the market, where your competitors are missing, allows you to meet the needs of local and national consumers, which puts you in a better position to attract new business – even if it’s a more expensive property.
Take the time to think about everything else as well as the price to give your company the best chance of success.
Want To Know More About Commercial Property Prices?
Understanding what can change the price of a commercial property, and knowing that the cheapest option isn’t always the right one, lets you make sure your business operates from the best property and location possible.
Since the property market can change quickly, it’s a good idea to speak to an expert so you know what to expect. If you know where you want your business to be located, find someone who’s familiar with that area, as they can tell you what you need to know but show you opportunities you might not have considered before. If this is you, get in touch with our team at Williams Sillitoe today and find out how we can help.