You may have heard the latest talking point when it comes to London office space in recent news. How do marble and gold staircases, a rooftop terrace and in-office dining with champagne on tap courtesy of La Petite Maison sound to you?
Well, if you are interested, Mayfair’s latest boutique offices have a price tag of £500 per sq ft - the most expensive in the capital.
In other commercial property news this week, investment in the market is set to reach a new record high. The first three quarters of 2015 saw transactions valued at almost £50 billion completed, with the final quarter alone set to see volumes exceed £20 billion. Scotland, on the other hand, has seen a dramatic fall in commercial property investments compared to the record figures in 2014. Many claim this is as a result of worry amongst investors over the independence debate.
Whether you’re looking to purchase an industrial building or a new office good advice is essential. Although it may seem similar to purchasing a residential property, there are definitely clear differences when buying a commercial property and here are some of the things to consider:
Finding your Property
You will need to identify which properties best suit your needs.
For example, how would you like your potential premises to be perceived by clients, customers, supplier and potential staff; what kind of facilities do you require; will you need exclusive rights to use meeting rooms, parking spaces and bathroom and shower facilities?
You will also need to assess how much space is required for office furniture and equipment and whether the current foundations within the property are adequate. For example, is the flooring suitable for any machinery you will use?
Does the property already benefit from the correct planning use? Not all properties do and so you may need to take advice from a planning consultant.
Location, Location, Location
Choosing the right location for your property can be the difference between succeeding as a business, and not.
Here are just some of the things you may want to consider when choosing your location:
- Do you need public transport links nearby?
- Is passing trade a requirement?
- Should you be located close to your key suppliers, customers, business associates and staff?
- Is adequate parking available?
- Will you cause any noise or disruption to any neighbouring premises?
- Is there adequate access for loading and unloading your goods for stores?
Money Talks
In addition to the purchase price of the property there will be additional costs in connection with your purchase. We have set out some below:
- Business rates – these applicable to all non-domestic properties in England and Wales. This is a local tax that is paid by the occupiers; the amount you pay will depend on a number of factors including the Rateable Value of the property
- Ground rent - occasionally you will pay a ground rent even where you have a freehold property
- Stamp duty land tax – based on a percentage of the purchase price
- Service charges – on industrial estate there are often service charges for the maintenance of common parts, such as the upkeep and repair of a private road
- Professional fees; these will include your valuers fees, if you are carrying out a survey of the property, and your legal fees
A member of our commercial property team will be happy to discuss your purchase with you and to provide an estimate of their costs.
You will also need to identify how you are going to fund your purchase and whether you will require the assistance of mortgage finance. This can often create delays and so it is advisable to obtain a mortgage offer at the earliest possible stage.
Exchange of Contracts and Completion
As soon as both you and the seller have agreed the purchase price you will need to do a number of things.
- Get your funding in place- this may mean surveys and valuations.
- Instruct your Solicitor- they will need to report on the title of the property and any other terms that you have agreed with the seller.
Once a satisfactory valuation/survey has been received your Solicitor will report to both you and your lender, after which you will be ready to exchange contracts and set a completion date.
Following completion your Solicitor will;
- Register the ownership with the Land Registry
- Submit the application for payment of Stamp Duty Land Tax.
You will need to remember to update your company stationary, get in touch with the utilities providers and the Local Authority for your business rates.
As you can see, there is a great deal to consider. The above information only touches on some of the key points. Our dedicated team of Commercial Property Solicitors have a wide range of experience, advising on all aspects of commercial property law and if you would like to discuss any Commercial Property matters please do not hesitate to contact Jeremy Clough or Rebecca Kefford on 01202 292424.