The commercial office space in London is booming, and despite Brexit woes, is seeing some of its largest investment in years. For many property investors and developers, the office space is an exciting proposition – but before jumping in, there are some key things to consider.
Demand for the area
The skill of a developer is to find a property not only where there is a demand for office space, but also might be overvalued and up and coming, therefore people are willing to pay more for it. This includes offices in Soho, finsbury park, bethnal green and other parts of East London.
Consider that if you want to rent out your office space at good rates, you need to find a place with good demand and this means that it is easily accessible from most train stations on TFL, has places nearby for lunch, coffee meetings and leisure such as gyms – and you may wish to incorporate this into your building too.
You can look at the demand by looking at surveys and reports over the years and looking at comparable offices in the area. This will also give you an indication on your pricing and what you can charge for rent each month or year.
Is there a huge demand for co-working and flexible office space in the area, such as Shoreditch and Camden? In which case, you may require a floor dedicated just to this.
Planning permission is absolutely vital for any building work that you are doing. Getting the right planning needs time and homework in providing designs, sketches and plans from your architect and construction team and understanding what you can do. The process may take a few months to a few years – and also incur legal fees. But doing this properly from day one is essential. Find out more about planning permission here.
Have you considered all the fees?
There are a lot of different fees to take into account when developing an office space and getting a full understanding of your costs can also help you determine how much rent you should be charging and funds you may need to borrow through development finance. Managing your fees effectively can help you get the best margins possible.
how to buy tinidazole online Fees include:
- Development finance fees (up to 6% per month) or rolled up until the end of loan term
- Legal fees
- Valuation fees
- Architect fees (see London architects for more info)
- Construction fees
- Broker fees (1% to 2% of loan term)
How you are financing it?
Development finance allow you to borrow money in stages, helping you effectively manage your cash flow and do the necessary work on your office, whether it is building it up from scratch from a plot of land or renovating or constructing an existing property.
Most loan terms are up to 12 months, or sometimes 18 or 24 months, with the option to roll up repayments until the end. If you are unable to pay off your finance by the end of the loan term, you may be able to refinance under slightly different terms as a way of extending it.