Look before you leap

 

When buying a commercial property, there are a multitude of factors to consider to ensure the premises is fit for purpose, not only today, but for the future also. Here are some things to weigh up.

 

Location, location, location

A location that seems perfect today could lose its lustre in the future.

However, assessing the strengths of a suburb and past business trends in the area can minimise any risks. Is the population increasing? Is there public transport available? Are there anchor tenants in the commercial zone or planned development within the area? “Practices located near shopping precincts with a strong anchor tenant will give the greatest exposure to foot traffic,” says Nicole Rigo, Commercial Product Manager at BOQ Specialist.

She adds that buying on a site with good street frontage with potential for eye-catching signage can make a real difference.

Nicole says it also helps if practice owners have exposure to the area and its demographics prior to looking to purchase their own site. A thorough review of competition or potential synergies within the area should also be part of your extensive research.

 

Support services and accessibility

“A practice needs to be easily accessible and accommodating to the needs of your patient base,” Nicole says.

Other factors such as parking, security and access to IT infrastructure should also be part of the equation. Superior and well thought-out property facilities can aid your practice in the day-to-day, but also could ultimately contribute to a higher potential resale value of the site in the future as well.

 

Growth goals for your practice

Nicole says prospective commercial property owners should understand the growth plans for their practice before agreeing to a purchase.  

“Some practitioners may currently be operating out of a one or two room practice, but their goal might be to expand in the future,” she says. “Does the property you’re looking at accommodate those growth plans?”
Failing to account for the anticipated growth could result in significant costs should a bigger site be required within a few years, particularly if your practice requires purpose-built fixtures and fittings.

 

Other elements to think about include:

Zoning and heritage-list guidelines – converting an existing house or property into a purpose-built medical practice could be subject to strict council planning laws.

Taxing times – the purchase of a commercial premises can attract GST, especially when buying off the plan, and that can make a significant difference to cashflow or the financial viability of the site. Also factor in costs such as stamp duty, initial set-up costs and signage.

Contract of sale – such a contract will typically set out the terms and conditions for the sale of the property, including a description of the property, the purchase price, a list of any fixtures or fittings that are included in the sale and the settlement date.

Doing your due diligence on a commercial property is a must, according to Nicole. That means paying attention to financial and legal considerations, having a building and pest inspection that discloses any underlying structural concerns with the property and infrastructure. It is also important to check that the property is correctly zoned for the intended use and relevant permits held if required.

This often exhaustive checklist underlines the importance of seeking advice from trusted banking, finance and legal advisers before finalising a commercial property deal.

“We have the industry knowledge and can help clients ask the right questions,” Nicole says.

 

Want to know more about a BOQ Specialist commercial property loan? Visit boqspecialist.com.au/commercial, or call the Client Service Centre on 1300 160 160.

 

 

^Disclaimer:

^{The issuer and credit provider of these products and services is BOQ Specialist – a division of Bank of Queensland Limited ABN 32 009 656 740 AFSL and Australian credit licence no. 244616 (“BOQ Specialist”). Terms, conditions, fees, charges, eligibility and lending criteria apply. Any information is of a general nature only. We have not taken into account your objectives, financial situation, or needs when preparing it. Before acting on this information, you should consider if it is appropriate for your situation. BOQ Specialist is not offering financial, tax or legal advice. You should obtain independent financial, tax and legal advice as appropriate.}