Commercial property owners invest a tremendous amount of capital, time, and commitment in their buildings and office units. When it comes time to sell, a proper valuation will ensure that the investment pays off.
If you’ve received an offer for your commercial property, or have been thinking of putting it on the market, it’s essential to know the fair market value you could expect to realise from the sale. Let’s take a look at the basics of property valuation to assist you in maximising your profit.
Commercial property values aren’t set in stone
The first thing many property owners refer to when they are trying to calculate the value of their building or unit is the municipal valuation they receive from the City of Cape Town. While this gives some indication of the land value, it doesn’t take improvements into account – and that includes the entire building and its contents.
The following factors all play a part in determining the value of commercial properties in Cape Town:
- Land values
- The size, type – and especially, grade – of office units in the building
- The presence of mountain or sea views from the offices
- High-tech facilities, including wifi, teleconferencing, and training rooms
- The tenant occupancy rate and average monthly rental per unit
- Availability of parking for employees and visitors
How are prices in your area looking?
Crucially, one of the most important factors in valuing your commercial property correctly is knowing what kind of prices similar properties have fetched in your area recently. The old saying that a property is only worth as much as someone is willing to pay for it holds true – and if prices are trending upward, it’s a great sign for potential sellers.
On the other hand, a market that’s growing slowly or even flat-lining may cause sellers to receive lower offers than they would like – and make only a small profit or even a loss on the sale.
Agents hold the key to accurate commercial property valuations
There are specialist land valuers who use advanced financial formulas to calculate the projected market value of commercial properties – and if you’ve applied for a new bond or bond extension on your building lately, you’ve probably met a few already.
While the valuations produced by these experts are extremely valuable, working off this type of estimate alone won’t guarantee you a successful sale. Commercial real estate agents, especially experienced area specialists, handle dozens of transactions on a monthly basis – and they know what sells, and for how much.
Before you put your commercial building or office unit on the market, it’s essential to work closely with an area specialist on the accurate valuation and marketing of your property. By agreeing on a lucrative but realistic price with your agent, you’ll give them an excellent value proposition to sell to interested buyers – and that could mean a faster sale, a timeous transfer and quicker availability of funds.
Thinking of selling? Let us partner with you
If you’d like to value your commercial property and market it strategically to legitimate buyers, contact us today. Our team of area specialists will work with you to maximise your return on investment.