Written by: Steven Jones on Thursday 28/04/2016
If you’ve invested in commercial property, the time might come one day when you need or want to sell your premises. We look at how you can maximise the sale of your physical assets.
Despite a slight reduction in the returns that can be made on commercial property, down to around 8.8% this year, from 2015’s high of 13.4%, it is still one of the most lucrative asset classes to invest in. Astute investors can maximise the return on their properties through some simple strategies before they sell.
To facilitate a smooth sale, particularly where there are sitting tenants, ensure that any upcoming rent reviews have been negotiated and settled to give the buyer a clear indication of the amount of rent he or she can expect from their purchase.
The better condition your property is in, the more profit you will make from the sale. It’s a simple concept. Unless you’re prepared to take a financial hit and accept a lower offer, make sure that the property is in good condition – the roof is intact, the doors and windows are modern, energy-efficient and secure, the services, such as gas and electricity, are in good order and have been professionally certified. If a property is vacant, ensure it is clean and clear of the last tenant’s accumulated debris. If you have a tenant in place, ask them to tidy and clean (if necessary) prior to viewings.
Of course, any savvy investor will want to sell at the height of the market to maximise profit, but in these days of uncertainty, and a stalling market the timing of your sale is vital. Of course, if you are in a situation where you have no option but to sell, you’ll have to accept that you may not realise the best price possible. However, if you can hold onto your property until the market picks up, you’ll be in a better position to reap greater rewards. Also bear in mind that commercial transactions can take a considerable amount of time so the market may have changed considerably from the time you send your property to market to the time you eventually sell.
A property’s value is based on what potential the buyer can see in it. So if you can offer a purchaser a wider range of options they will be more prepared to buy at the right price. Your local planning office will be able to offer advice as to whether a change of use application will be looked upon favourably.
Being proactive in your approach to selling will stand you in good stead to make a quick and profitable sale. While it’s usually the buyer’s responsibility to undertake searches, shrewd sellers can put together an information pack which, although it will cost money, will recoup more than the outlay in the end.
If you need any advice or information about selling a commercial property asset, contact the Eddisons team. Our qualified and experienced professional advisors can offer you expert guidance to ensure that your property is sold efficiently and effectively.