In today's competitive real estate market, commercial landlords face increasing pressure to maintain and enhance the value of their properties. However, the time, carbon used and cost of a rebuild is very significant, so a better option would be to upgrade it. Upgrading buildings is not just about aesthetics; it's about future-proofing investments, attracting and retaining tenants, and improving overall profitability. Here are the key reasons why commercial landlords should consider upgrading their buildings, supported by some relevant statistics.
A survey by Jones Lang LaSalle found that 77% of corporate real estate leaders believe that the provision of high quality office space is critical to attracting top talent to their organisation; there is a lot that commercial landlords can do to provide for this need. By incorporating extra amenities, end-of-trip facilities (such as secure bike storage and showers) or communal café areas, landlords are answering to the needs of many organisations and will aid securing new tenancies.
Furthermore, a modern, and well-maintained building is more marketable than one that is run-down and hasn't got the best possible facilities. According to a survey by CBRE, 72% of tenants are willing to pay a premium for buildings with modern amenities and sustainable features. This increased marketability can shorten vacancy periods and allow landlords to charge higher rents.
Upgraded buildings generally command higher property values. Following the change in EPC regulations in 2023, proactive steps to improve energy efficiency and working towards the 2030 goal are becoming more important, and according to a report by the National Association of Realtors, properties with energy-efficient upgrades can see an increase in value by up to 10%. This is only going to grow in importance - after 2030, buildings under an EPC rating of E cannot be let out, so it is crucial to start thinking about these changes, now. Several measures to improve EPC ratings can be put in place, such as installing energy-efficient lighting, improving insulation and exploring renewable energy options. Any investment into modernising infrastructure will yield significant return when the property is sold or refinanced.
The real estate market is dynamic, with changing trends and tenant preferences. By upgrading buildings, landlords can stay ahead of the curve and ensure their properties remain attractive and competitive. The Urban Land Institute highlights that properties with modern amenities and sustainable features are more resilient to market downturns and changes in tenant demands.
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In an ever-evolving market, staying ahead through strategic upgrades is not just a choice; it's a necessity for commercial landlords looking to maximize their investments and ensure long-term success.
