When a property is valued, comparison and area are key components in determining its value. After all, measurement is an important way to compare different properties.
In order to ensure a fair means of valuation, building measurements must be undertaken when buying, selling or renting a commercial area.
While measuring a building sounds like standard practice, the nature of a commercial space determines what the requirements are for measurement and what is deemed as a ‘rentable’ space.
What does this mean for you as a commercial property investor? Simply put, the type of property – be it retail, office or industrial – will dictate how it is measured, and in turn, how it is valued.
Understandably, there needs to be unity across measurement procedures – a market value must be determined by a uniform method of comparison. But since the nature of commercial spaces vary, the restrictions on measurements also reflect this.
Each commercial rentable area has a different basis for comparison – for office, retail, and industrial buildings.
Since not every space is measured in the same way, it’s important to educate yourself on what parts of your commercial area determine its official measurements – so you know where your building stands and what standards it’s weighed up against.
To ensure the uniform procedure of measurement, Property Institute of New Zealand and Property Council New Zealand have developed the Guide for the Measurement of Rentable Areas.
The guide breaks down regulations for three different commercial rentable areas: office buildings, retail buildings, and industrial buildings.
While the measurement requirements for each commercial rentable area varies, there are regulations that must be adhered to and standards that must be followed.
Here are some key points that determine the measurement of a commercial rentable space:
1. Office buildings
The total rentable area of an office is split into two categories – either the entire building, or the respective part or full floor only.
The total rentable area of an office building or floor is taken to be the sum of all ‘rentable areas’, which includes functionable space such as upper floor shared lobbies, toilets, and kitchens. Stairwells and other public spaces like the ground floor lobby, however, aren’t included.
Measurements are taken between internal faces of external walls or windows.
How to measure office: Sum of all appropriate floor spaces = total rentable area
2. Retail buildings
Measurements for retail buildings are also taken from internal faces of external walls, but extended to the glassline – where there are windows or shop displays. Inter-tenancy walls are an additional consideration.
How to measure retail: Interior space + any exclusive areas available to tenant = total rentable area
3. Industrial buildings
The rentable area of industrial buildings includes fully-enclosed areas, partly enclosed areas – like lean-to’s, and unenclosed areas – like canopies.
Areas are measured by the external face of enclosing walls.
How to measure industrial: Fully enclosed + partly enclosed + unenclosed = total rentable area
Because rent is based on area, knowing exactly what spaces of your commercial building contributes to this is vital.
If buying, selling or renting a commercial space, it’s important to have accurate information on the measurements – so a market value can be determined.
Get your building surveyed
Consulting a surveyor to get your commercial building properly measured will mean you’ll be able to gain certified areas for use in valuations.
Talk to a qualified valuer
A qualified valuer knows the importance of building measurements and what their restrictions and regulations are. They’ll be able to properly measure your building in accordance with the guide for measurement, and how it compares to other properties within the market.
With building measurements, a valuer can provide a realistic figure for your property, and advice on its rentable value.
Here at TelferYoung our valuers are experts in dealing with commercial spaces and their specific building regulations. Contact us to speak to a valuer.
Posted 5 months ago