11 Things to Consider Before Leasing Commercial Property

Leasing Commercial Property

If you cannot afford to purchase a commercial property, or you need to operate your business from a property because of its size, location or features, it helps to lease commercial property. As you conduct your business, leasing commercial property can be an affordable option to manage your cashflow and allow you to invest in other aspects of your business. Whether you are operating your business from one location, or have offices or shops locfated throughout Melbourne, leasing commercial properties can be an effective strategy.

At National Retail Group, we manage various commercial shops for rent and office spaces for lease. If you are looking to operate your business from a particular location, let us know what requirements you have so that we can identify options for you. Our team of experienced commercial property specialists will help you secure a premises to conduct your business. Before you make a decision, it is important to do your research, speak to advisors and talk to other business owners in your network.

Here are 11 things you should consider before leasing a commercial property

Location

The location of your business is key. Choose wisely because it is costly to move frequently from one location to another. It is important to consider your target market, the location of competing businesses, the location of your suppliers, accessibility and other factors. Once you have settled on a suburb or two, you will then need to consider the type of property by thinking about size, amenities and features.

Rent

The rental amount is a key determinant for many. Leasing a commercial property costs money on a monthly basis. Each property is priced differently based on market factors, size, features and other factors. It is important to lease a property that is within budget so that you do not fall behind on payments.

Features

Consider the property’s features. If you are operating a medical clinic, retail shop, office space or other business endeavour, make sure the property you choose has the features you require. For example, a retail shop will require an open front with space for customers to browse your products. A medical clinic will require a reception area, with consultation rooms that can be closed for privacy.

Outgoings

Operating a business incurs expenditure. The monthly outgoings of your new commercial property will need to be considered in your budget. Consult the commercial lease to understand exactly what outgoings you are responsible for. Failure to maintain payments could jeopardise the continuation of your operations.

Competition

Your business is never isolated. Shopfront competition can hinder the success of your business. Consider which businesses are also operating in the area so that you can successfully conduct your operations without losing customers to others.

Term of lease

The term of lease is crucial. Businesses operate as a going concern. Unless you are planning to sell your business, cease operations or move to a new location in the future, you need to enter into a lease for at least a few years. Some leases contain fixed terms and others also contain options to renew.

Size

The size of the property will need to suit your business needs. You will need space for staff and customers. A small business premises can be distraction for customers and may discourage people from seeking employment at your business. Make sure the design and layout of the property will support your business for the better.

Rights and responsibilities

The commercial lease agreement will contain terms and conditions that need to be reviewed by you. Your rights and responsibilities will be documented in the commercial lease. Make sure you understand what is expected of you and what you are permitted to do. Failure to comply with the terms of the commercial lease may have negative consequences.

Limitations

Your commercial lease property may include limitations. These limitations may be set by the landlord, local council, owners’ corporation or under law. For example, you may not be permitted to seat more than a certain number of people in your premises. Or, you may not be able to conduct a particular type of trade without a permit.

Growth

Choose a commercial property that will help grow your business. While it can take time to find the ideal property, and given you will have to make compromises as you are unlikely to find a property that ticks every box, make a rational decision. Avoid being too particular on the property you want because delaying the process may result in good properties becoming unavailable.

Strategy

Do not forget about the strategy of your business. Everything you do needs to align to your strategy and objectives. Otherwise, the property from which you conduct your business will not support your business’s growth and development. Whether you are planning to target a particular market, position your business close to complementing businesses or operate from a location that is near your suppliers, consider how the premises will support your strategy.

At National Retail Group, we offer commercial landlords and tenants support in relation to commercial properties. We manage a wide range of medical, retail and commercial properties and can help tenants find the best property to conduct their business. We provide white glove transaction management services so that you can feel comfortable leasing a commercial property. For further information, or to request a confidential discussion, please contact us on 1800 413 986.

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