WHY LOCAL KNOWLEDGE AND CONNECTIONS ARE VITAL TO CREATING GOOD DEALS
Published 9 June 2022
The industrial and warehousing sector of the commercial property market has been buoyant for some time now, with investors achieving strong returns. But maximising those returns still requires a really good understanding of the local market, and the kind of personal connections which can bring together the perfect occupier for each individual building.
I was reminded of this recently as we started negotiating terms on a large Norwich premises which have stood empty for some years. With the freehold recently changing hands, the new owners were obviously keen to find an occupier, but this was not your standard warehouse ‘shed’.
A huge (58,000 sq ft) building, it had formerly been a data centre of a large financial services firm. As such, it had seen a very expensive – and specialist – fit-out, in order to meet the massive power requirements and substantial cooling needs that a major data centre presents.
Of course, finding a new tenant seeking a data centre would have been ideal, but the world doesn’t work that way. Maximising this particular opportunity required a little lateral thinking: the interesting part was the substantial power capacity – two separate 7.6MVA supplies.
This is where local market knowledge comes in. An agent with their ear to the ground, constantly networking and looking for new opportunities, will always have a mental list of possible deals to be done, and this is what happened in this case.
We knew of an occupier in the engineering and manufacturing field with a major power need. And so we were able to matchmake, potentially giving the investor a tenant who may be prepared to pay a premium rent, and providing the occupier with the ideal premises without incurring the substantial cost of installing a new high power supply into an existing or new building. The very definition of win:win.
The commercial agent really adds value in this way, using their knowledge of the market to create deals which benefit both parties. This often happens ‘off-market’ – commercial property agency is not solely about placing advertisements for premises and waiting for enquiries to start rolling in!
That kind of market knowledge generally only comes from someone who is active locally – it is difficult to build when you are based many miles away and you are not immersed in the local business community. Those agents who attempt to operate from London, or even Cambridge, cannot hope to be able to be dealmakers in the same way.
That is backed up by the latest EGI Radius On-Demand rankings, which provide a snapshot view of the latest commercial property deals and which agents are landing them across the UK. In terms of both numbers of deal done and square footage transacted, Arnolds Keys topped the list for Norfolk, proving that you can’t beat local knowledge and connections.
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