If you find yourself with a building that has seen better days, it can be difficult to make the decision on which direction you want to head in. While a complete rebuild can be tempting, refurbishment can often have just as successful results.
Considering almost one million square metres of office space is predicted to be added to the market across Australian CBDs in the next three years, coupled with the fact that office vacancies are continuing to fall, there are many reasons why refurbishing a building might provide significant gains for building owners. However, before diving in, there are a few things to be considered.
Is your building refurbish ready?
Most commercial building interiors have a lifespan of around 5-10 years. Post this, they more often than not start to look dated and will lose commercial value. No one wants to lease an office that looks like it belongs in the previous decade. If the building is deteriorating, it might also give tenants a reason to opt out of their current lease. Both of these things mean a loss of income for building owners, so knowing when it’s time to refurbish should be a top priority.
It’s undeniable that refurbishing comes at a price, however the same can be said of hidden costs with postponing refurbishing. Although refurbishing your building will certainly come at a price, hidden costs arise continuously from putting a refurbishment on the backburner. Tenant retention is much more likely to be high in modern and well-equipped buildings. For example, end of trip facilities – such as showers, lockers, and change rooms – are often the first to show signs of age, but are often overlooked in day to day maintenance. As these facilities are often used by tenants every day, they will likely have an impact on whether they decide to renew the lease at the end of their contract. It’s important to keep in mind in the current social climate that tenants are also looking for a socially and environmentally conscious premises. Typically, when you appoint a design firm, the most common advice is to replace rather than refurbish. While some see this as a way to save you money, many won’t tell you about how reusing existing resources will not only benefit you but also the environment with less landfill waste.
When it comes to refurbishing, building owners should ask current tenants for input on what they see as a priority. Tenants are the best source of information about the current state of the building, and this will also open communication channels, improving the overall tenant/owner relationship. More often than you might expect, tenants are quite happy with the existing infrastructure and would only like a few things updated.
At the end of the day, refurbishing rather than renewing might be a slower and more calculated process, but it will almost certainly save you money in the long term.