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A shopping list

Drawing up a needs assessment (see Chapter 1) will help you identify the ‘must haves’ and the ‘nice to haves’ for your new business premises. These, in turn, will develop into a search specification that will help you find the right property. Remember to incorporate your 5-year strategy into your search analysis as you view each potential property. Never lose site of the bigger picture and your long term needs.

Your final choice of premises, in the end, is likely to involve some compromise but you will save yourself time and effort if you start your search with a clear idea of what you are looking for.

The right Commercial Agent

The objective of using any professional agent is to gain from their professional knowledge and expertise. Choosing and using commercial property agents is no different from any other client/agency relationship. You’ll get the best result from a qualified agent who knows the local area and market. However they will need a thorough understanding of your property needs. Spend as much time as possible with your agent; share your 5-year plan and your operational requirements. Create a list of essentials and ensure your agent adheres to them throughout the process.

Professional help

If you do not have the time to manage the selection process for your new business premises consider appointing an independent property adviser to help you. An adviser will bring objectivity to the search exercise and help you create your shopping list. They will also complete the legwork to find and manage the commercial agent(s), as well as view and re-view properties before producing a shortlist for you to consider. It is likely your property search will involve dealings with more than one commercial agent and could involve viewing many properties – some over several visits. Overall this option could save you a substantial amount of time away from your day job with substantial cost savings. Using a property adviser will also keep your plans confidential until you are ready to make an appropriate announcement.

Managing negotiations
  • Always take professional advice when you are negotiating for your new premises. If you have an inhouse legal department, don’t assume they will have all the property knowledge and skills you need.
  • Professional advisers (legal and/or property) will bring an extra edge to the negotiations to secure the best deal – whether it is about negotiating a better break clause or a rent-free period while you refurbish the property, or just advising on the minutiae of the contracts and agreements. The savings and benefits they can achieve will usually outweigh the costs.
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Site visits

When you are viewing potential properties, adhere to the specification (shopping list) you have created following your needs assessment.

Take pictures

In the first instance these will just help you remember which property is which as you complete the first viewings and work towards a shortlist. Later you will probably take more pictures of building specifics to help with your final selection. Rank the properties against the specification to help prioritise.

Time and motion

Your time is valuable. Be ruthless about ignoring properties that don’t fit your requirements. And if your agent sends details of properties that don’t match the specification you have given them, insist that they work to your brief.

Test and compare

At the end of this exercise the aim is to have a shortlist of 3-4 properties to choose from. Your final shortlist must comprise genuine choices, which match your requirements as closely as possible.

Trade-off and compromise

It is unlikely that any of your final short listed premises will mirror your requirements in every respect – after all, it is a ‘wish list!’ At this stage identify the trade-offs and compromises, and decide which are acceptable and how you can overcome any issues that might result.

This is the time to identify costs and benefits to your business such as:

  • Running-costs
  • The cost of space per person
  • Fit-out costs
  • Landlord incentives
  • Business rates
  • Grants and financial incentives (if these are available)

Ask specific questions to your agent or advisor if these benefits are not forthcoming.

Next: Planning the move

Things to consider: top tips for commercial property negotiations
  • Create a property search specification
  • Brief your property advisers/commercial agents well
  • Take notes and pictures at each viewing
  • View shortlisted properties several times
  • Compare short listed properties against your specification and 5-year plan
  • Use professional independent advisers for the property negotiations
  • Look for a rent free period from your landlord while refurbishing
  • Get specialist legal advice to arrange your lease and ensure your final contract reflects your 5-year analysis plan
  • Enquire about potential grants or government initiatives that may relate to your selected building location