Logistics warehouses are tending to adopt XXL formats due to the evolution of consumption patterns. With more advanced technology, small warehouses are becoming more important for last-mile logistics. In a market where yields are increasingly attractive, the valuation of these assets is of crucial importance.
Located between warehouses and offices, the business premises are mainly dedicated to production and handling activities, occupying up to 80% of their surface area. Their size, which varies considerably, can be used by both local SMEs and international companies.
Long considered unclassifiable, car parks are nevertheless real real estate assets with high yields that investors do not think about. Rental security associated with a low rate of charges remains the main investment criterion. Its location, its configuration and its users are crucial elements for its valuation.
Business premises...!
Business premises, located between warehouses and offices, are mainly dedicated to production and handling activities, occupying up to 80% of their surface area. Their size varies considerably, and they can be used by local SMEs as well as international companies.
As a result, they mainly attract a market of users but also the interest of investors looking to diversify their portfolio. Although the market for these premises is generally stable, their great diversity complicates their valuation, requiring a specific approach for each case, which our experts carry out with precision.
Three main types of business premises can be identified
• Factories: Factories represent a distinct category of business premises, designed specifically for particular production processes. They are built around these specific processes and serve as dedicated buildings for a specific activity.
However, the major obstacle lies in finding initial financing due to the specificity of the construction and equipment needs, as well as in the eventual resale, given that these buildings may not correspond to conventional commercial real estate standards.
• Business premises: Business premises are mainly designed to meet the needs of SMEs and small businesses, often in the context of manufacturing or warehousing activities. These spaces are typically formatted and standardized to accommodate these specific types of activities.
They are generally found in areas of less than 1,000 m², which makes them suitable for the more restricted operational needs of these companies. In addition, they are often located in business parks where shared services are available, thus providing an environment conducive to business development.
• Mixed-use premises: Mixed-use premises are distinguished by a balanced combination of offices and activity space. Indeed, these facilities generally include a significant proportion of offices, representing approximately 50% of the total surface area, while the part reserved for activity is more restricted, with a ceiling height generally of around 3 meters.
This configuration allows an opening to the outside thanks to sectional doors, thus facilitating logistics and handling operations. In addition, these spaces are often heated to ensure comfortable working conditions for employees and to protect temperature-sensitive equipment.
What attributes characterize the "Business premises" asset ?
Business premises are widely spread throughout France, whether in large urban areas, smaller towns or even rural areas. Originally, these premises were often family workshops or small structures, located near residential areas.
What are investors' expectations ?
Business premises play a relatively modest role in the French corporate real estate landscape, typically representing between 3 and 6% of total investment, compared to around 10% for logistics and 65% for offices. This proportion is mainly attributable to a market dominated by users.
Whether for the latter or for investors, the building selection criteria remain similar: they favour recent, adaptable structures, and well located in the first or second rings of large cities, benefiting from good visibility and easy access to transport infrastructure.
As for associated office spaces, they generally represent between 10 and 15% of the total surface area of the site, depending on market expectations. In addition, the structural attributes of the buildings play a crucial role, such as the absence of asbestos roofing, offices with sober layouts, heated premises, loading docks, etc.
Finally, it should be noted that investors will also place great importance on assets leased under long-term firm leases, with solid and reliable tenants.
What are the main valuation criteria for business premises ?
The diversity of business premises, whether in terms of their size, nature or sector of activity, makes their assessment particularly complex. Our experts therefore adopt an individualised approach for each case, taking into account the specific features of each property. In addition, the clients themselves can vary considerably: whether they are end users, real estate companies or international investors, their expectations and selection criteria can differ greatly.
Thus, our approach is adapted to each client, guaranteeing an accurate and relevant assessment of each business premises.
• Location: Constraints related to the urban planning scheme, proximity to a commercial area.
• Vacancy rate: The vacancy of surrounding premises indicates a weak market.
• Facilities: Comfort and performance of infrastructure, features, lighting, heating, etc.
• Equipment: Ceiling height, number of openings at the dock, compliance with standards, etc.
• Standards: HQE, accessibility, ERP and regulations specific to certain activities. Given their variety and mix, business premises are often subject to conversions. The « Groupe Delta » team generally offers different valuation scenarios. For example, an investor interested in locating a business premises dating from the 1960s could consider different approaches.
If the building has renovation potential, a « property merchant » approach can be adopted, consisting of keeping the existing walls while rehabilitating the interior of the premises.
Another option would be the land approach, where the land is valued based on data collected by the « Delta Group » on the asset’s environment, such as the location of the land and the constraints of the urban planning, and then demolished in order to construct a new building that meets the needs of the market.
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- See also !
Logistics warehouses
In a market where returns are increasingly attractive, with more advanced technology, small warehouses are gaining importance for last-mile logistics....
Parking lots
Long considered unclassifiable, car parks are nevertheless high-yield real estate assets that investors do not think about. Rental security associated with a low rate of charges remains the main investment criterion...
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