LOCATION

Location is the key aspect for any commercial  setup, be it an office or a retail space. Location is  decided based on various factors such as  accessibility, demand, catchment and competition.  For instance, an office space in Guindy, Chennai is  considered central due to ease of access to airport,  hotels and every other part of the city. It has metro  rail connectivity and good infrastructure in terms  of internet, power and allied services.

SIZE

Size is predominantly based on the format of  operation and also the number of employees/  staffs. For a large IT/BPO office, it is imperative  to have a single large floor plate of office space  for ease of management and maintenance. This is  not so the case with an admin or a corporate  office which can afford to operate from relatively  smaller floor plates for different divisions placed  on multiple floors. Real Estate and rental values  being high, it is important to get the perfect size  to avoid wastage of financial resources and also  not to keep it too cramped for operations. Post  Co-Vid-19, sizes are getting recalibrated to  provide for work from home and as well as for  physical distancing.

LEASE OR BUY

This is a decision that has to be taken depending upon  the location and also the intended years of operation. For  instance, for a firm which intends to operate for a long  duration in a prime locality, it makes financial sense to  own a property instead of paying rentals that keep  getting incremented annually and in a location that has  potential for further appreciation in capital values. Also  purchase is a better option, provided the interest on the  same or opportunity cost of the money is lower than  appreciation potential. It definitely makes more sense to  rent a property where the rentals per annum are lower  than 5% of property value.

BUDGET & RENTALS

Properties which are better located with better  facilities always command a higher rental.

The rentals depend on factors such as:

• Location – a property in Central Business District(CBD) always commands a higher rental

• Quality of the structure/ property – depending on age and suitability, the rentals vary.

• Specifications – a property with better features will command a better rental. For instance, a Grade A office building always commands a higher rental. In  the case of retail, a space in the ground floor always  commands the highest rental. No of parking slots,  floor level, age of the building play an important role  in the same. Many clients look for a marquee property  in a city to match their company profile.

ACCESSIBILITY

Availability of public transport systems and ease of  access for the workforce is the most important criteria  for any commercial setup. For instance, an office  space in Guindy, Chennai is ideal as it well connected  by road, rail and metro. In the case of a retail setup, a  location like T.Nagar is ideal as it is not only well  connected but also is centrally located and caters to  the population living in every part of the city.

PARKING RATIO

This is expressed in terms of total number of car  parks compared to the size of the building. Most  generally every commercial building has a car  parking ratio of 1:1000 which technically means  that there is 1 car parking space for every 1000 sqft  of leasable space (super built up area) on offer.  Parking spaces are most generally in the basements,  stilt level of the building and open land areas around  the building

NOC & APPROVALS

It is important today to ensure that a property has  complied with all statutory compliances and the  following basic approvals are in place

• • • Land & Building approvals including local body approvals
    • Fire and (rescue) services department – No objection Certificate (Fire NoC)
    • Other NoCs as may be required for specific operations

FINANCIAL TERMS &  REGISTRATIONS

Rentals are not the only factor that impact a wise  financial decision. There are several other terms that  come into a contract. These include refundable  security advances, term of lease, lock-in period,  increments on rentals, maintenance, notice period  for vacation, rent free period, registration  procedures and costs thereon etc. It is important to  know fully what is on offer!

LITIGATION ON PROPERTY

It is imperative for any tenant or buyer to do due  diligence on all legal aspects before entering into any  contract so as to avoid legal hassles at a later date.  Litigations can range from title disputes, claims from  legal heirs, wrong representation by the seller,  improper description of the property, statutory dues,  financial claims etc. It is best advised for a client to  seek the advice of a lawyer in this regard.

MARKET INTELLIGENCE AND  CHOICE OF PEOPLE TO WORK WITH

When you step into a new city / town or an unfamiliar  location, take help to find a trust-worthy  agent/consultant, local real estate broker or realtors.  Gain from the specialized knowledge and market  information that a broker provides from his  experience on dealing with industrial real estate/  warehousing in the area and this will help you avoid  several unknown and localized pitfalls and prepare  you to get the best property and the best deal on the  same. Also check on the background and history of  the broker, his capabilities, systems, processes,  database, online trust factor and relationships with  local landlords.