Understanding What Type of Commercial Property is Best for Your Next Investment

Commercial properties come in a wide range of styles and sizes, each with its own unique characteristics and potential uses. If you are considering investing in commercial real estate, it’s important to have a basic understanding of the different asset classes of property available. We understand that it can be intimidating to consider the amount of research, administration and money that goes into purchasing commercial property however this doesn’t have to be the case. Below is a brief breakdown of some of the different varieties of assets you may elect to purchase based on your circumstances.

1. Office Spaces

Commercial office spaces are available in many different scopes. These could be in the center of the CBD in a large high-rise building, or in a smaller suite out in the suburbs. They can be leased to businesses as a whole building, floor or individual office space. Choosing which option is more suitable for your investment portfolio will depend on the kind of tenant you are targeting. Some key things to take into consideration are the sectors with the most employment growth, a business’s ability to work in a hybrid environment (especially in a post COVID world) and the office’s accessibility for the workforce.

Here are some key things to consider when looking at purchasing an office space:

• Is it in close proximity to food retailers, public transportation networks and car parking spaces?
• Will it be fully self-contained with an office area, a kitchen, toilets and air conditioning?
• Does it have an external loading dock with access for heavy vehicles?
• Are there any restrictions on noise, water usage or accessible hours?
• Is there room to grow and expand in this space if required?

2. Industrial Spaces

Industrial spaces are commercial properties designed for businesses that require space for manufacturing, storage, or distribution. These properties can range in size from small warehouses to large industrial parks. They are typically located in areas with easy access to transportation, such as highways or ports and are not inner city. Industrial buildings can be leased to businesses as a whole building, or individual spaces.

Here are some key things to consider when looking at purchasing an industrial space:

• Are the ceilings high enough for a tenant to stack storage shelving?
• Can it be easily accessed with heavy vehicles and machinery?
• Is there an external loading dock?
• Is there ample parking for all staff?

3. Retail Spaces

These are commercial properties designed for businesses that sell goods and services to the general public. These properties can range in size from small retail shops to large shopping malls. They are typically located in high-traffic areas and can be leased to tenants as a whole building, or individual retail spaces. Retail buildings may be anchored by a large tenant or grocery store and include smaller tenants, such as restaurants, clothing stores, and specialty shops as well as essential services such as medical centers.

Here are some key things to consider when looking at purchasing a retail space:

• Is it in a highly or densely populated area that is growing and developing?
• Are there already tenants in the building that have ongoing leases?
• Is there onsite car parking and nearby public transport hubs?
• Are the public amenities well maintained and cared for?
• Is there an immediate lack of this offering elsewhere in the vicinity driving demand?

4. Hospitality Buildings

Hospitality buildings are commercial properties designed for businesses in the hospitality industry, such as hotels, motels, and resorts. These properties can range in size from small motels to large resort complexes. They are typically located in high-traffic areas, generally in tourist destinations, and can be leased to businesses as a whole building or individual rooms.

Here are some key things to consider when looking at purchasing a hospitality space:

• Is there enough space for all the features you want included in the venue?
• What are the competitors in proximity to this space and how will this property differ from them?
• Will the space need a full refit or just some minor renovations?
• Do you have tenants in mind for a space like this?

5. Mixed-Use Buildings

Mixed-use buildings are commercial properties designed for a combination of uses, such as retail, office, and residential. These properties can range in size from small mixed-use buildings to large mixed-use developments. They are typically located in urban areas and can provide a range of amenities to residents and tenants.

The commercial real estate market is diverse, with a vast range of property types and potential uses. Understanding the different types of commercial properties available is essential when considering investing in a commercial asset. By identifying the type of property that best suits your investment goals, you can make informed decisions and maximize your return on investment.

If you are looking for more direction regarding commercial property investment or you are unsure about what asset you are best off purchasing in today’s market, get in touch with one of our agents today on 1300 458 800 or email info@tgc.com.au.

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