|Experts help the property audit process|
When it comes to managing commercial and retail property, it is important that a building audit is undertaken on a regular basis to ensure that the property is correctly performing for the tenants in occupancy and the landlord. Property performance needs to take into account many things including the rules and regulations that apply to building usage and construction codes.
Here are some tips from our bulletin for Commercial and Retail Property Agents.
A building performance and audit can be many different things depending on property type, location, and tenants in situ. Importantly the property manager for the property and the landlord should be working together on a regular basis as part of the building audit process.
Depending on the property type, its complexity, and its unique issues, the building audit can also involve the assistance of experts such as:
- Engineers to review the structure for safety and compliance to current building and construction codes
- Accountants to review income and expenditure performances of the property over the last 12 months and the expected results in the coming budget period.
- Solicitors to review lease documentation to ensure that the leases and licenses for all tenants in the property and the mix are up to date and accurately administered.
- Health and safety consultants to review occupancy safety and emergency evacuation procedures
- Risk management consultants reviewing the property on behalf of the landlord and insurers
- Mechanical engineers to review the performance of plant and machinery within the property
- Quantity surveyors to assess the costs of ongoing property usage given the existing plant and machinery, together with capital expenditure items.
- Maintenance contractors associated with particular parts of the building maintenance program to advise on maintenance systems and routines
- Security consultants to review the security and access factors of the property for the landlord and for the tenants
You can add to this list based on the needs of the property and the way in which it is currently used. In addition to all of those items above, the property manager should be completely familiar with the building operation today and the associated operational costs. Those costs should be regularly compared to other properties of similar type in the same location. High levels of outgoings and building expenditure will impact the net income and the leasing opportunities for the property.
A building audit should happen regularly in conjunction with the analysis of income and expenditure for the coming financial year. The audit itself can be part of the financial year business plan for the property. Any identified concerns can be categorized into priorities and levels of response. The building audit will also highlight any larger items of property renovation, refurbishment, redesigned, or capital expenditure.
If you need some more ideas to help your commercial or retail property management and leasing activities, you can get our bulletin here.