Step Two of Colliers International Strategic Advisory’s 5-Step Strategic Property Playbook offers some key actions property owners and investors may want to consider around extracting greater value from assets. Presented by Andrew Graham, National Director, Colliers International.
Our experts unpack the most critical issues affecting private organisations and governments and provide a guide on how best to respond to changing market environments and what to consider to create a robust property strategy that ensures success.
Through our experience, we know that property investors, owners and indeed Government property decision makers are required to constantly take stock of changes in their respective markets and industries in order to extract the greatest possible value from their assets.
Recent global events have brought about a new set of challenges for existing businesses. However, with challenges comes opportunity. It may be time to undertake an audit of your property assets to ensure that they are working harder for you and your overall business.
Here are some key actions property owners and investors you might want to consider:
Sale and Leaseback
With interest rates low and the overarching weight of capital and purchasers still chasing property assets there is no better time to consider structuring a sale of operating real property with a lease back to your business. Yields remain at historically record lows and this means the timing is ripe to take advantage of investor’s desire to pay a low return on assets. There is opportunity to recycle the passive low returns on your property assets into higher returns from your business. Sale and Leasebacks are a balancing act of structuring your businesses’ ability to pay a reasonable rental, rental reviews and the like. A number of large companies have restructured a large part of their portfolios in order to unlock last assets and unleash funds back into their operating business such as Telstra and BP most recently.
Increase efficiency
To increase efficiency, consider: Where does my business really need to be located? Is my business network efficient? Does the location need to be more centralised, closer to new infrastructure or on cheaper land to allow for business expansion? Where are your staff and customers based? What data can I access that can support a better network for example GIS mapping, demographics, mobile phone network profiling?
Maximise your asset’s income
Is your space is rationalised efficiently? Do you have excess space that could be rationalised to earn you an additional income? It could be time to lease or sublease any space you do not need. An example might be leasing an unused yard for storage or exploring signage opportunities. Another area that Colliers has specialised in the arranging income and/or significant energy cost reductions through large scale solar energy partnerships.
Adding Value
Has your site got development potential or surplus land? Can you partner with a property professional to add value and business equity via approvals and rezoning? Can you amalgamate your site for a much better overall result with neighbouring sites?
Colliers International Strategic Advisory team recently completed a Project Delivery Agreement (PDA) enabling a property owner to benefit from a rezoning process at nil upfront cost. Our services enabled the property owner to attribute a third-party developer to invest capital and reduce risk for rezoning to go ahead, while being able to continue the day-to-day use of their property and substantially increase the value of their holding.
A new business era will soon emerge post the COVID-19 pandemic. Use this time to plan and implement your next property strategy, to outpace your competitors and to achieve a greater return for your business.
For more information about how to extract greater value from your property asset or portfolio, contact an expert from Colliers International’s Strategic Advisory team today.