Your Guide to Commercial and Industrial Property Valuations in Perth and Adelaide

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Adelaide and Perth property valuations from a business perspective

 

As the owner or potential purchaser of a commercial or industrial property, you’ve probably noticed that he market dynamic is wildly different to that for residential valuations. While some reasons for the differences in valuations seem sensible, others are strange and unpredictable. Today we give you a guide to industrial and commercial property valuations in Adelaide and Perth.

Commercial property valuations in Perth and Adelaide

Commercial property is defined on the basis of its zoning. Different local councils

may use different designations (especially common when comparing Perth property valuations to Adelaide property valuations), but generally a commercial area is one where a business is run, excluding businesses involved in raw processing or manufacturing (which would be zoned ‘industrial’ – see below).

Determining factors for commercial property values

If location is important is determining a residential property’s value, it can be an absolute make-or-break factor in a commercial transaction. Here are some of the main determining factors for commercial property values:

Foot traffic – Is there heavy foot traffic created by surrounding businesses and facilities?
Business assets – These are not always a major factor, but some niche assets make it far easier to find a buyer. For example, existing fuel tanks at a service station, a technologically advanced kitchen in a restaurant, or base interior decoration assets in a hotel may be a major selling point.
Age of the building – Structures in commercial locations are often far older than those in similar residential locations, and this can be a major Perth or Adelaide property valuation factor.
Floor area – This usually comes at a premium price in commercial districts, and a small increase in floor area can make a big difference to property value

While it won’t make a lick of difference to your Perth or Adelaide property valuation itself, it is also worthwhile looking at a demographic analysis of the area compared to your business’s target audience. While this is not strictly a ‘property value’ factor, it will certainly tell you whether the property is valuable to your business, or not. Many property valuation firms offer demographic information within the locality section of their report.

Industrial property valuations in Perth and Adelaide

Industrial property will again be defined mostly on the basis of its zoning. Industrial properties are not necessarily exclusively dedicated to manufacturing; however manufacturing can only occur in industrial zones.  Research and development parks are also often considered industrial.

Determining factors for industrial property values

Industrial properties aren’t as sensitive to precise location, nor to exact floor area of either the property or the land. Their value is mostly determined by:

Age and condition of the building – Improvements and repairs to an industrial building are typically very disruptive to business, so values go down along with the condition of the structure
Size of property and building – Not quite as critical as with commercial buildings, but still important
Included assets – Often industrial properties are purchased by companies in industries similar to the seller, so machinery and other assets included with the sale can be a significant factor in the Perth or Adelaide property valuation

Floor area is not as important in industrial property valuations in Perth and Adelaide. Size will still make a difference, but the price per square metre is likely to be much lower than in commercial zones.