Landlords Market Set to Take off Again
Commercial property rentals have stabilized after the fall out of the global recession, however - given on-going global instability they are expected to remain at current levels for the short term.
Slower economic times do present opportunities however, and these include refurbishing the property to take advantage of the inevitable uptick in rentals in the medium term. A scarcity of work has made contractors highly competitive on price and property owners are well advised to take advantage of the current environment by upgrading their properties where possible.
Marc Edwards, the Managing Director of Spire Property Management, comments that it is inevitable that it will become a landlords market once again, as the wheel turns, and until such time landlords must be proactive and have areas of their buildings refurbished to make properties more attractive to future tenants.
Edwards offers the following advice on some key refurbishments that landlords can look to undertake:
“Landlords must assess the building both internally and externally and, crucially, they must relook at the target market that they are trying to appeal to and take measures to ensure that their building is competitive within the market and within the geographic node that the building exists.”
Reduce occupancy costs
“With rising electricity tariffs, one of the most significant refurbishments that a landlords can undertake are those that reduce electricity consumption and therefore a reduction in the cost of occupancy,” says Edwards, who advises that the obvious place to start is energy management, where simple changes such as converting to LED lighting or utilising other energy efficient light bulbs can have an immediate impact on operating costs.
“There are numerous consulting firms who can assist landlords in planning a strategic utility cost reduction and Eskom itself is very willing to engage with landlords to educate them on how to reduce their expenses and their impact on the main power grid.”
Set up green leases
However – the “greenness” of your property is reliant on the buy-in of your tenants and landlords would be well advised to implement green leases with their tenants.
A Green Lease sets out the shared responsibilities of landlords and tenants, providing a platform for sharing the benefits of the enhanced performance of the building and balancing the respective costs between each party. A Green Lease ensures that a building is operated in a sustainable way.”
“There are many things that can be done to make a building more appealing and competitive within the market. This means that when the market does turn landlords will be in the perfect position to not only attract and secure tenants but to also demand higher rentals,” concludes Edwards. “Landlords must not just sit back and wait for things to change – they need to be proactive and position themselves in anticipation of better times to come.”