4 Ways to Add Value to Your Commercial Property
The UK commercial property market is changing quickly, and commercial property owners have faced unprecedented challenges in light of Brexit and COVID-19. Fortunately, there are a few ways that owners can add value to their commercial properties, reduce operational costs, and maximise their return on investment. Below, we are going to discuss four reliable ways to increase the value of your commercial property, with expert insight from Ben Harrison, a chartered surveyor and Managing Director at MyPower.
1. Install a rooftop solar PV system
Ben Harrison describes how most commercial properties have large unused roof space that offers enormous potential for low-cost electricity generation. He explains “Installing a rooftop solar PV system allows businesses to generate their own clean electricity at around one-third of the cost of traditional grid-supplied electricity. This is a huge advantage considering that electricity prices have increased by a massive 75% (for large industrial consumers) in the past 10 years Along with reduced electricity costs, businesses can also make an impressive return of investment of between 14%-16%, by producing their own clean electricity at around 5p/unit fixed price. Companies can utilise a rooftop solar PV system to reduce their overhead costs, lower CO2 emission, and boost the overall value of their commercial property. This makes solar for commercial businesses an excellent option in most cases, particularly for companies with high energy consumption and landlords looking to increase their return on investment and make their properties more attractive to tenants.
2. Obtain a new EPC
An Energy Performance Certificate (EPC) gives you an overview of the energy performance of your commercial property, along with recommendations on how to improve the energy-efficiency of the building. Obtaining a new EPC is a great place to start when you are searching for ways to increase your property value. Following the assessment, your property will be given a rating of A-G (with A being the most energy-efficient and G being the least energy-efficient.) Minimum Energy Efficiency Standards (MEES) came into force in April 2018 which means that building owners cannot let or renew a lease on their property if the EPC is F or G rated. Commercial properties with an EPC of F or below must complete work to improve the energy efficiency of the building. According to Ben Harrison: “The addition of solar PV to a building significantly improves its EPC rating.” Under MEES, building owners are expected to contribute up to £3,500 towards energy improvements. This may seem expensive, but the government expects that these costs will be quickly recovered through the cost-saving benefits. Completing energy-saving improvements will reduce your business overheads which in turn, will add value to your commercial property.
3. Replace old appliances
Old appliances can be a massive drain on your energy and cost a significant amount of money to run. Upgrading to energy-efficient appliances is one of the simplest ways to reduce your electricity use and lower your property’s carbon footprint. Replacing old or damaged appliances should also slash your monthly energy bills and improve your building’s EPC rating. To give you an idea of the cost-saving potential, experts at sust-it.net advise that new fridges are around 49% cheaper to run. Tenants and buyers are aware of the cost-saving benefits of modern, energy-efficient appliances. With that in mind, replacing old appliances can be an effective way to increase your property value and make your commercial property more appealing to prospective tenants and buyers.
4. Improve building amenities
Ben Harrison describes how improving building amenities can be a simple way to create an attractive space and increase the value of your commercial property. Adding a staff room or outside seating areas is relatively low cost but will instantly add value to a tenant. He adds: “What a tenant is prepared to pay for the building determines its value.” If you take steps to lower a tenant’s ongoing costs, then the property will become more appealing and deemed as a higher value.
In this time of economic uncertainty, it is more important than ever for businesses to reduce their operational costs and boost their bottom line. Fortunately, there are plenty of ways for owner occupiers and landlords to add value to their commercial properties and maximise their return on investment. Electricity costs are becoming a huge overhead expense for companies. With that in mind, providing cost savings through the installation of a rooftop solar PV system or other energy efficiency measures offers benefits to both the landlord and tenant. Implementing the above suggestions will make your property more energy-efficient, cut running costs, and make your property more attractive to prospective tenants and buyers.