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Not as simple as it seems: what problems does a cheap rental rate entail?

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Commercial real estate
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  • 05/03/2019 - 17:07
  • 1 комментария

The price of a commercial property is a specific thing. It is formed not from abstract categories, but from certain criteria: type of construction, quality of repair, planning, infrastructure, transport accessibility, improvement of the territory, prestige of the area. The higher the quality of the object, the higher the price, and there are no objective reasons to reduce it. Therefore, the proposal to rent an office in Moscow-City at the price of a room in the old administrative building is at least suspicious. We list the main points that may affect the pricing of the rental rate. 

Poor transport accessibility

The office is a place of constant circulation of employees and customers. It should be accessible and convenient. The road from home to office and back should not turn into an extreme journey. The proximity of metro stations, public transport stops, and road junctions is a significant advantage, which, of course, will not get to the tenant for free. 

Lack of parking

Another problem that lies behind the low rent - parking spaces. Paid parking or, in extreme cases, its absence will require additional cash injections above the rental rate. Moreover, if the problem with payment of parking spaces can still be solved, it is hardly possible to make up for their absence.

Operating costs

The rental rate in fact only the nominal figure. The real costs of maintaining the office will actually be somewhat higher. As a rule, operating costs are not protected in the lease agreement. The tenant pays utility bills, which consist of payments for hot and cold water, electricity, gas and heating. A separate item of expenditure is an Internet provider, which may turn out to be a monopolist and request an exorbitant price for its services. Preliminary acquaintance with the invoices paid by tenants will help solve this problem and estimate in advance what the actual costs of renting an office will be.

"If you already swept away all the most depressive rent options and at first glance found a quality office, find out the size of operating costs," says Ekaterina Volkova, director of the ILM market research and analysis department. "They may be higher than you expect for a number of reasons. First, the building may be the only and expensive Internet provider. Usually such a provider, like the management company, is affiliated with the owner of the object. Such a situation is most common at class C facilities. Utility payments may be billed separately, and their size will be different every month, specify this nuance in advance, ”says Ekaterina.

 Repair quality

How much it will cost to repair, at best - finishing, office space - another serious question. The current roof, cracks in the walls, problems with engineering systems can cost as much as the nominal rental rate.

Unfavorable infrastructure

The proximity of the business center to industrial areas or landfills significantly reduces its cost, and, accordingly, the price tag for the rental of vacant space. The view of the wastelands and the exorbitant concentration of pollutants in the air do not contribute to the creation of a comfortable working space.

Pricing policy in the commercial real estate market is quite logical, the more comfortable the room, the higher the rate. Renting an office for a nominal fee, be prepared to take along with the room and his problems.

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/
  • 05/03/2019 - 17:07
  • 1 комментария

The price of a commercial property is a specific thing. It is formed not from abstract categories, but from certain criteria: type of construction, quality of repair, planning, infrastructure, transport accessibility, improvement of the territory, prestige of the area. The higher the quality of the object, the higher the price, and there are no objective reasons to reduce it. Therefore, the proposal to rent an office in Moscow-City at the price of a room in the old administrative building is at least suspicious. We list the main points that may affect the pricing of the rental rate. 

Poor transport accessibility

The office is a place of constant circulation of employees and customers. It should be accessible and convenient. The road from home to office and back should not turn into an extreme journey. The proximity of metro stations, public transport stops, and road junctions is a significant advantage, which, of course, will not get to the tenant for free. 

Lack of parking

Another problem that lies behind the low rent - parking spaces. Paid parking or, in extreme cases, its absence will require additional cash injections above the rental rate. Moreover, if the problem with payment of parking spaces can still be solved, it is hardly possible to make up for their absence.

Operating costs

The rental rate in fact only the nominal figure. The real costs of maintaining the office will actually be somewhat higher. As a rule, operating costs are not protected in the lease agreement. The tenant pays utility bills, which consist of payments for hot and cold water, electricity, gas and heating. A separate item of expenditure is an Internet provider, which may turn out to be a monopolist and request an exorbitant price for its services. Preliminary acquaintance with the invoices paid by tenants will help solve this problem and estimate in advance what the actual costs of renting an office will be.

"If you already swept away all the most depressive rent options and at first glance found a quality office, find out the size of operating costs," says Ekaterina Volkova, director of the ILM market research and analysis department. "They may be higher than you expect for a number of reasons. First, the building may be the only and expensive Internet provider. Usually such a provider, like the management company, is affiliated with the owner of the object. Such a situation is most common at class C facilities. Utility payments may be billed separately, and their size will be different every month, specify this nuance in advance, ”says Ekaterina.

 Repair quality

How much it will cost to repair, at best - finishing, office space - another serious question. The current roof, cracks in the walls, problems with engineering systems can cost as much as the nominal rental rate.

Unfavorable infrastructure

The proximity of the business center to industrial areas or landfills significantly reduces its cost, and, accordingly, the price tag for the rental of vacant space. The view of the wastelands and the exorbitant concentration of pollutants in the air do not contribute to the creation of a comfortable working space.

Pricing policy in the commercial real estate market is quite logical, the more comfortable the room, the higher the rate. Renting an office for a nominal fee, be prepared to take along with the room and his problems.

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