Commercial property acquisition – In a nutshell, expert advise from Noel StevensClick here to view the transcript
In this video I will cover 5 topics, timing, pricing, buying or leasing and planning.
Firstly, timing. I often have conversations with people who need to move in the next month. This isn’t enough time to properly locate all options, investigate their suitability and negotiate the best terms. Give yourself a minimum of 3 months.
Secondly, pricing. Each situation will be different, to establish the right price you must understand what competing stock is trading for in the area. Having conducted a thorough search is a great starting point.
Next, do you want to buy? Many small businesses prefer to own their premises. But do you have the funds available either in cash reserves or borrowing. Get advice from an accountant to confirm if buying is right for you.
Leasing on the other hand gives greater flexibility, enabling new premises to be taken every few years as the business expands. Leases are commonly of 5 or 10 years in length for existing buildings. Lease breaks are also common with a 5 year lease having a break at say year 3. Be aware that if you are in competition for a property the length of lease offered is an important deciding factor. Pushing for shorter terms and lease breaks may lose you the property.
Lastly, planning. Do you understand the use class you need? Retail or leisure uses are not suitable for office or industrial units without approval from the planning authority. If you need a change of use ensure it’s part of the deal. Don’t take the risk. Get the planning approved before you complete. If in doubt seek advice from an agent or planning consultant.
The best advice I can give is to get advice, from relevant professionals, that way you can focus on your business safe in the knowledge that you’ve done the right deal.