Thinking of selling your office space in 2022? Consider this first

As we’ve welcomed in 2022, many of us have been excited to return to our plush offices and daily cups of coffee accompanied by a side of water cooler gossip. However, high COVID case numbers have dealt another blow to office life, forcing many of us back to work-from-home routines for the foreseeable future, writes property expert Helen Tarrant.

If, like me, you’ve spent the last two years going back and forth between the office and home, you might be starting to wonder whether you even need a physical office at all.

Offices located in CBD areas often have higher repayments, significant maintenance costs and if the space is tenanted, it’s very likely that you’ve been asked to reduce rent several times over the past few years.

So, if you’re ready to throw in the towel, sell up, and move your business to a complete work-from-home operation, there are few things you should consider first!

1. Don’t sell if you don’t have to

I know that with COVID-19 putting hardships on many businesses, it can seem like your only option is to sell your main asset – your office space. However, if you don’t have to sell your commercial space to get by, I recommend you don’t do it.

Even if you can’t manage the repayments yourself, I would recommend finding a strong anchor tenant who can lease the space from you. An anchor tenant is essentially a business that’s main services require them to be in an office, such as medical, grocery, fast moving consumer goods, beauty or retail, and is looking at settling down and signing a long-term lease.

These types of tenants can help take the load off your property mortgage and still leave you in a position to explore working from home.

2. Speak to your office neighbours

If you work in a communal office building with lots of individual offices, go and speak to your neighbours if you’re thinking of selling.

Get their insights around what they are likely to do in the current COVID environment. If they are also looking to sell, you have the opportunity to band together and increase value for potential buyers.

If they don’t want to sell, they may also be open to purchasing your space from you, which means you can keep transactions easy and friendly, knowing that your property is going to good hands.

3. Look to overseas investors

If you do decide that you want to sell your office space, it is recommended that you do your due diligence and don’t just sell it to the first person interested.

I know it can seem very tempting to do this in an uncertain COVID market, but it’s actually in your best interest to take your time and look for investors that genuinely see the value of your property and are willing to pay top dollar for your asset, particularly if your office is in a high foot traffic area or CBD.

A great option is to look to overseas investors (particularly from Asian markets) who are potentially seeking a great new real estate opportunity in Australia.

Investing in property during a pandemic can be tricky unless you want to play the long-term game, however investors with large property portfolios and revenue streams are the best way to go. They are looking at the potential your property will have in the next 10-20 years, so they are more likely to spend big on your office and make you a strong offer.

Regardless of whether you want to sell or stay in the office in 2022, always do your research and speak to a qualified commercial property specialist or agent about the value of your office space and what is right for your needs.

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