Finding the right tenants for commercial property isn’t just about filling a void - it’s about creating long-term, mutually beneficial relationships that protect your investment while supporting your financial goals.
Step 1: Pre-Acquisition Market Analysis and Asset Management Planning
The most successful commercial property strategies begin before you even purchase. This critical first step involves:
◆ Conducting thorough market research to understand current tenant demand in the area
◆ Identifying the “sweet spot” in terms of unit size, specification, and lease terms for your target market
◆ Evaluating whether the property might require reconfiguration to meet market needs
◆ Assessing potential value-add opportunities through subdivision, refurbishment, or change of use
◆ Analysing the costs versus returns of any potential asset management initiatives
◆ Understanding competing properties and their vacancy rates
◆ Consulting with local agents about current tenant requirements that aren’t being met
◆ Reviewing planning regulations that might allow for beneficial changes
By understanding tenant demand before purchase, you can acquire properties with strong letting potential and plan strategic improvements that will maximise returns. This could mean converting a single large unit into several smaller ones that better match market demand, upgrading facilities to appeal to higher-quality tenants, or even pursuing a change of use to target a more buoyant sector.
Step 2: Know Your Property Inside Out
Before marketing begins, assess your property’s strengths and weaknesses. Consider:
◆ Size and layout – Does it suit single occupancy or could it be split; how flexible is it for users?
◆ Condition – Is it lettable as is, or does it need work?
◆ Use class – What type of business can occupy it under the current planning?
◆ Location specifics (transport links, nearby amenities, local workforce, footfall)
◆ Building quality and specification
◆ Energy performance (increasingly important with MEES regulations)
◆ Unique selling points (period features, natural light, outside space)
◆ Amenities and services – for example, parking or air conditioning?
Understanding these elements allows you to position your property appropriately and target suitable potential occupiers. Remember that sometimes the best tenant might come from an unexpected sector - former bank premises can thrive as restaurants and some warehouses can transform into trendy office space.
