Occupied Space: What makes an area commercially desirable?

The media seems to proffer continual reports of ‘gentrification’ of areas across the country. From London to Hull, there are those who are constantly trying to sniff out the areas which are taking opportunities and shifting expectations in the hope that they will provide a larger return on investment. While this is in many ways a concept linked to residential property, there is a core of truth when it comes to commercial property too.

Affluence

Especially the case for retail property investments, the local average income per household is a key consideration. A busy high street attracting visitors with disposable income is clearly an advantage for an investment on the high street. Similarly, if an area benefits from a demographic of highly educated and qualified occupants, it is likely that office space will be a sound investment. In the case of areas such as Woking, many high profile corporate names are inspired to move out of London in the knowledge that they can attract a quality workforce from the local population.

Neighbours

A quick but informative way to judge an area’s commercial prospects is by taking a look at the businesses who already call a town home. Success breeds success and sometimes it takes just one or two large brands to move to an area to make it an attractive destination for others who share the industry. In this way, that area will become attractive for commercial property investors. Looking at the rise of Camberley as an example, this once unassuming little town is now home to SC Johnson Ltd, Siemens, Toshiba and Merrill Lynch amongst others. With such established neighbours, other office properties can look to attract long-standing and reliable tenants.

Planning

What infrastructure plans are in the pipeline for a town or area? This could be in the form of major transport operations, large-scale commercial developments or socially based regeneration. All of these will mean that the demographics of an area is likely to evolve, so consider whether this means that your chosen town is like to benefit, or indeed suffer, from such a change.

Transport

Proximity and access to London are an undeniable factor in the potential landlord income of an area. For this reason, commercial properties in Surrey have enjoyed good yields in the past and can look forward to further success into the future. With the M3, M23 and M25 running through the county, road access is extremely straightforward. International commercial tenants can be attracted by the proximity of both Gatwick and Heathrow airports, and rail infrastructure means that commuters benefit from a variety of travel options.

Space

The South of England demands a substantial premium whether for residential or commercial properties. However, compared to the London market, many prospective commercial tenants see the increased space that can be enjoyed as a benefit to that location. As an investor, you will seek established and reliable tenants, which towns like Guildford or Woking now find in greater number relocating from London.

Appearance

Finally, it is true that human nature is to judge on appearance. So how does the town look? The genteel market feel of Farnham oozes an atmosphere of affluence, while modernist purpose built parts of Woking make it somewhere that feels a natural home for a growing tech hub.

Many Surrey towns enjoy business districts on their outskirts, which make them in turn, a popular destination for good retail tenants who are seeking to benefit from these workers’ pay packets. In this way, the one aspect feeds the other. It is true therefore that the commercial value of Surrey is clear, but the variety of commercial properties that it boasts can make it confusing. This is where the advice of an experienced commercial professional can offer investors a real advantage.

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