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Top tips for choosing business premises

Location, location, location is key for your shop or office

Rental growth in the office sector has remained very healthy, with almost 20 per cent more chartered surveyors reporting a rise in demand for office property which is great news for property investors, according to a survey by the Royal Institution of Chartered Surveyors (Rics).

The continued slowdown in consumer spending is thought to have directly weakened the retail property industry, with smaller retail operators being squeezed by larger competition.

Demand has risen at the fastest pace since the end of 2004, with property investors being spurred on by the boom in the stock market and the strength of the global economy.

Chief economist Milan Khatri commented that the disparity between retail and office property demand is symptomatic of a two-tier economy and said that Britain's economy is turning toward business service provision rather than relying on retail.

It has also been found that even the process of finding new premises, can provide a significant boost for your businesses.

Top five tips for finding business premises

1 Size really does matter.
It's a good idea to budget to buy more space than you currently require

Vacant office space can be leased out to another company, creating an additional revenue stream for your business.
New premises can then cater for any future expansion of your business

2 Location, location, location
Often the sector your business occupies will dictate how close you need to be to your customers (present and potential), suppliers and similar businesses?

Think 'Harley Street' and the medical profession or 'Fleet Street' & journalism etc.
Location is important for the perceived prestige of the company or its values, i.e. locating in an attractive greenbelt area can have positive benefits for employees and customer relations.

3 'Lights, Power, Action'
Make sure the building has adequate lighting, power sockets and broadband connections. Other technical aspects to investigate include;

Internal maintenance arrangements
Cable ducts
Security systems

Also bear in mind the heating or air conditioning arrangements, if you saw the new location in the winter, are you satisfied it won't become a furnace in the summer? Additionally excessive repairs can put unnecessary strain on your accounts.

4 Ask and you shall receive
If possible use a chartered surveyor (if the initial cost is not prohibitive) for your business. The 'expert eye' and subsequent advice might save your company a fortune on a bad investment.

Other sources of information for guidance include;

Members of your professional association
Chambers of commerce
Local authorities
Property magazines, broadsheet newspapers etc.

5 Parting with the cash
Deciding on the best way to finance the purchase is probably the most important factor you will have to consider. A commercial mortgage is a specialised commercial loan, with one crucial distinction from a regular commercial loan.

With a commercial mortgage the legal claim over the property resides with the lender until the loan amount and accumulated interest has been fully repaid. Like private home ownership, this method of financing also means that the business stands to gain from any appreciation in the value of the property.

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Also: Commercial mortgages: Mortgage quote