Built assets contain enormous untapped potential however many property owners are not realising the optimal amount of rental income or capital value, through inaction and lack of investment.
The built environment is continually evolving with new technology, workplace and lifestyle changes and shifts in market demand. Like all businesses this places an onus on property owners to adapt their assets to meet changing demands and maintain their investment.
Establishing the measures to optimise a building’s potential and carrying out a feasibility study to evaluate the return on investment of those measures is a multi-disciplinary exercise encompassing all aspects of the physical asset, management, leasing performance, statutory and legal compliance, market demand and planning. Areas which should be considered in this context include:
Occupancy Levels and Rental Income – Evaluating the occupancy levels and rental rate when compared with current market levels.
Lease Terms and Tenant Covenants – Establishing the quality of the tenants, robustness of the lease agreements and re-gearing leases strategically.
Maintenance Management – Establishing the cost efficiency of the building maintenance regime, is there a professional planned preventative maintenance (PPM) regime in place or a series of expensive emergency call-outs? Efficient maintenance management typically means fewer disruptions to tenants and lower service charge bills.
Energy Performance – An assessment of the building fabric and mechanical & electrical services to establish age, performance and cost savings that can be realised by: upgrading building services and improving the thermal efficiency of the fabric.
Health, Safety and Wellbeing – Does the building provide a safe place to work, rest or play and are the environmental services allowing the building users to be their most productive? Is the building secure and are there any inherent hazards putting lives at risk?
Increase of Lettable Area – Assessment of the floor areas to identify any potential lettable areas lost to circulation on sub-divided floors, opportunities to infill lightwells, convert basements or extend over flat roofs to increase floor space.
Modernisation – Study of the buildings services, finishes, facilities, amenities and features to assess how close they meet current demands of building users.
Market Demand – Assessment of current market demands, which uses are driving the highest rents and values and the expectations of tenants driving those prices.
Sustainability Accreditation – Assessment of the ability of the building to achieve a BREEAM (or equivalent) sustainability rating, the savings achieved in operating the building by implementing certain measures and the attractiveness to tenants (particularly those with CSR commitments) of obtaining an accreditation.
Statutory Compliance – An assessment of whether the building complies with the law of the land, such as the Disability Discrimination Act 1995/ Equality Act 2010, Health & Safety at Work Act 1974 and Control of Asbestos Regulations 2012.
Property Management – An assessment of the provision and costs of the property management regime, the levels of service experienced by the owner and tenants and enforcement of lease terms.
Marketing & Branding – How is the building represented in the market? Is it viewed as a desirable place to work, rest or play in or somewhere to be avoided? How is the building considered by tenants as representative of their image or brand and a place where their employees want to work?
The feasibility study should include a joined-up assessment bringing together the different proposals into an execution plan for the delivery of those changes and targets for the return investment.
Identifying the works and measures to be undertaken is half the process and a good project manager should be engaged to plan, oversee and delivery the enhance building.
Doyen Land advises all types of building owners – landlords, long-leasehold tenants and owner-occupiers on maximising the performance of their buildings. If you feel this would help your organisation, please call us on 0207 947 4 947.