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Monday Dec 03, 2012

Prepare for when the market turns in your favour, property owners advised

Commercial property rentals have stabilised after the fallout of the global recession. However, given the continuing instability, they are expected to remain at the present levels for the short term.

Slower economic times present opportunities. These include refurbishing properties to take advantage of the inevitable uptick in rentals in the medium term.

A scarcity of work has made contractors competitive on price, and property owners are advised to take advantage of this by upgrading their properties where possible, says Marc Edwards, the managing director of Spire Property Management.

He says it is inevitable that it will become a landlords' market again, but until then, landlords must be proactive and have areas of their buildings refurbished to make their properties more attractive to future tenants.

Edwards offers the following advice on some key refurbishment that landlords can undertake:

They must assess their buildings, inter nally and externally, review the target market they are trying to appeal to and take measures to ensure that their buildings are competitive for their geographic nodes.

With rising electricity prices, among the most significant refurbishments that landlords can undertake are those that reduce electricity consumption and, in turn, the cost of occupancy.

Edwards says the obvious place to start is with energy management, where simple changes such as converting to LED lighting or other energy-efficient light bulbs can have an immediate impact on operating costs.

"There are numerous consulting firms who can help landlords to plan strategic utility cost reductions and Eskom is willing to show landlords how to reduce their expenses and their impact on the main power grid.

"However, the greenness of your property is reliant on the buy-in of your tenants, and landlords would be we l l advised to implement green leases with their tenants."

A green lease ensures that a building is operated in a sustainable way and sets out the shared responsibilities of landlords and tenants.

This provides a platform for sharing the benefits of the enhanced performance of the building and balancing the costs between the parties.

"Many things can be done to make a building more appealing and competitive. This means that when the market does turn, landlords will be in the perfect position to attract and secure tenants and also to demand higher rentals," says Edwards.

"Landlords must not just sit back and wait for things to change - they need to be proactive and position themselves in anticipation of better times to come."

Weekend Argus (Sunday Edition)


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