Improving commercial returns for investors in commerical property
New energy and data smart buildings are helping to improve returns to investors in commercial property according to commercial electrical contractor Emanuel Baveas.
Mr Baveas, owner of Focus Electrical and serial property investor, said tenants were attracted to smart buildings because the outgoings were less, which in turn resulted in lower vacancies and better returns for investors.
“The industry standard is now sensor-controlled LED lighting, and in common areas like car parks and corridors, you can decrease energy consumption by 60-70%,” Mr. Baveas said.
“We’re constantly looking at ways of improving the energy efficiency of the building.
“We also see more open plan buildings with the ability change shape to suit tenant requirements. This approach is driving a more flexible wiring system so that we can make changes easily to the sub-boards and metering when tenancies change.”
Mr. Baveas said another trend was to enable multiple telco providers into the building and provide multiple data communication options from fibre optic to NBN.
A contractor to business park developer Graystone, Mr. Baveas said he had seen an increase in activity in the commercial sector of late, an improvement in the quality of new buildings and retrofitting of older properties.
“The biggest thing is the efficiencies in lighting, the power factor correction and the introduction of solar onto some buildings,” he said.
The owner of a retail complex at Underwood, a warehouse at Murarrie and investor in four commercial building funds, Mr. Baveas said he was confident that commercial investment returns would perform strongly in the near future.
“Commercial property in Brisbane hasn’t had the capital growth that we’ve seen in residential but in Sydney there has been a 75% increase in some parts of the market. There is the potential for Brisbane to follow suit.
“I’m currently seeing a lot of developers and other people I work with in Brisbane who have been in residential property, move out of residential and into the commercial market.
“Commercial property has been quiet for the last couple of years because the residential market was going gangbusters, but the new precinct in Hamilton has triggered some commercial interest, not just from investors but from people who want to move office and be in these newer areas.”
Mr. Baveas predicted the key growth areas would be in suburban business centres and corridors into the city including;
- Brisbane Technology Park at Eight Mile Plains
- Commercial land holding a Rochdale
- Logan Road.
He said to capitalise on the improving commercial market, in addition to his direct investments, he has also invested in four property funds with Stronghold Investment Services.
“It’s good to have a range of property investments which include properties externally managed management and your own direct investments
“You have to tip in cash to the property funds, but I have found the returns are generally higher than owning the property outright. It’s also hassle-free, you don’t have to deal with tenants or rates, but you do have to be prepared to hang in there for the long term.”