Sunny Landa, director at NG Chartered Surveyors, argues that while most commercial property landlords might not be in the same league as Zuckerberg, taking risks with their portfolio will almost certainly reap rewards:
What do commercial property landlords and the founder of Facebook have got in common? They both benefit from taking risks.
Mark Zuckerberg famously said: “The biggest risk is not taking any risk… In a world that changing really quickly, the only strategy that is guaranteed to fail is not taking risks.”
The risks the Facebook founder took, it almost goes without saying, have paid off big-time.
While most commercial property landlords might not be in the same league as Zuckerberg, taking risks with their portfolio will almost certain reap rewards. And yet many in the industry seem reluctant to take the leap onto the next level.
We know what tenants want, and it isn’t tired old Grade C stock. Statistics from the Nottingham Office Forum show that investing in refurbishment of office stock it has a huge impact on a landlord’s position by ensuring that the property is let or sold quicker, thus lessening any impact of void rates.
Of course selling or letting your property in Nottingham won’t make you as rich as Zuckerberg. The reward for the risk has a glass ceiling – as do headline in a city such as Nottingham; the reward comes in letting your building in a significantly shorter timeframe.
Presentation is key when letting a property; first impressions count, and not just for offices – for retail and industrial stock too. A potential occupier often makes his or her mind up on whether to pursue a letting within the first couple of minutes of viewing a property – why would they sign a lease if a building is scruffy and unloved? And what does it say about the way a landlord feels about his tenants?
One such example of this was when City Link, the stricken courier service moved vacated their premises in Nottingham and left behind a tired building that had little appeal to any aspirational companies.
With NG’s involvement and direction the landlord realised that to get the rent he wanted, he’d have to invest in the property. He did, and we recently completed on a deal to let a 26,200 sq ft warehouse facility to Fittleworth Medical, a leading home dispensing company at a headline rate of £5.25 psf after a programme of refurbishment that met the incoming tenant’s requirements.
Landlords need to remember that they’re entrepreneurs, and that means having the strength of conviction to follow through on a vision. While countless people have ideas, entrepreneurs act on the ideas they have and take them to the next level.
A well-managed property portfolio will provide attractive financial returns now and in the future. NG’s advice to commercial property landlords of all sizes is: don’t be afraid to invest – as at the end of the day, you will end up with the tenant you deserve, and that should be the point when the reward far outweighs the risk.
