How to increase the value of your commercial property

Increasing the value of a property, commercial or residential, is often of interest to those who own the property. However, there are many factors that can affect the value of a commercial property, including size, intended use, location, and much more.  This article contains recommendations from expert conveyancers on how the owners of commercial properties can increase the value.


Preparing to sell commercial property

Of course, a big priority when you come to sell or rent your commercial property is making sure you receive a good return. A building used for business purposes is a valuable asset after all. However, there are other considerations that need to be made in commercial conveyancing. The following checklist includes gathering relevant information about the property that will need to be passed over to the buyer. It can also help reveal the key areas which can help maximise the value of the property.

  • Planning permissions.
  • Use Classes and certificates.
  • Property surveys and searches.
  • Liable costs (stamp duty land tax, business rates, etc)
  • Energy Performance Certificate (EPC)
  • Title deeds.


How to calculate the value of a commercial property

Accurately valuing a commercial property can be difficult, especially when it contains a lot of equipment or bespoke machinery. Fortunately, local conveyancing solicitors can help. We do typically value commercial property using a number of different strategies, including:

  • Cost – add together the cost of the land the property is on, and the costs associated with the construction of the building. This should include any additional constructions and any features on the land, such as car parks or landscaping.
  • Sales comparison – doing research on similar-sized commercial buildings in the local area will provide an indication of how much your property should sell for.
  • Gross rent multiplier – gives an understanding of how long it will take to pay off the property using gross rental income. Simply multiply the total rental income the property can generate by the holding period to get a valuation.
  • Income capitalisation – the property can be valued by considering the net (minus vacancies and expenses) rental income and dividing it by the total estimated property value. This gives the rate of return for the property which, when taken against the operating income, gives income capitalisation.


Tips for increasing commercial property value

Increase energy efficiency

Implementing energy-efficient technologies and practices, such as LED lighting, insulation, and energy-efficient HVAC systems will make the property more attractive to commercial tenants. This is because good energy efficiency represents cost savings for their operation over time. A good way to display these features to buyers is to invest in securing a BREEAM certificate (Building research Establishment Environmental Assessment Methodology) and a favourable ECP rating.

Make improvements

It seems obvious but proper maintenance and cleaning can go a long way to boosting the value of a property. This also means updating the interior and exterior with modern systems and features when necessary.

Upgrade technology infrastructure

Positioning your property to appeal to businesses that require strong technology infrastructure can raise value. Features such as high-speed internet, Wi-Fi connectivity, and smart building security fall into this category. Equally, if you can show that the property has the scope to support research and development activities, or be developed itself, it could also be attractive to tech-focused tenants.

Environmental certification

Consider obtaining environmental certifications, such as BREEAM (Building Research Establishment Environmental Assessment Method) or LEED (Leadership in Energy and Environmental Design), which can enhance the property’s green credentials and market appeal. Recent years have seen more and more emphasis placed on green properties. Find out about green leases.

Location and curb appeal

Although commercial properties are primarily for conducting business premises, they are still assets that represent the image of the company. As such, commercial buyers might be willing to pay more for properties that are based in desirable locations. This can also serve a practical purpose. For example, being closer to retail shops and suburbs is better for employee experience.


Cramlington conveyancing services

The Toomey Legal team specialises in commercial property transactions, supporting both buyers and sellers from start to finish. We are experienced in providing advice on business property law regarding both freehold and leasehold commercial properties. In every case, we first consider your position and how to get the best results for you. Don’t hesitate to get in touch if you have any questions.