Is high demand for office space reason enough to drive up prices?


10-October-2011

Caravelle House is an example of an office building …

As sure as one would cry wolf over the “exorbitant” prices that some property-owners are asking for office space, clients should also realise that they can also do their part in getting affordable office space as well as doing a quick exercise to determine whether they really need a new, trendy and expensive office.

As the market opens up more and more, new and existing businesses are continuously searching for office space to rent.
 Everyone is looking for ways to expand their businesses and bring their services closer to their clients.

As is perfectly natural for every business, however, tenants are looking for affordable rent, in a good and easily accessible location but also value for their money.

There are two main types of buildings in Seychelles offering office space for rent: office building, which is a building with only office space for rent, and commercial buildings, which have both shops and offices.

Office buildings, however, are seen as the trend and considered as higher quality than commercial buildings and a trend is emerging for them to have services such as lifts, parking facilities and security, which include both watchmen and cameras.

Although some tenants say they want value for their money in affordable office spaces, there is also a niche market for high-quality office spaces. This includes the offshore sector, banks and private audit firms.

A good number of buildings in Victoria have turned old and tenants want to relocate, but with the scarcity of land in the town to build their own offices, the obvious choice would be to rent them.

However, rent -- especially of new buildings -- has increased significantly, making offices … whereas Kingsgate House is a commercial building, with both offices and shops.unaffordable.

Gemma is a young entrepreneur who was doing part time work providing consultant services and said she now wants to quit her job and be a full-time consultant but needs an office.

“I want to go freelance but I need an office as I want to be more accessible to my clients,” she said.

“It is sad, however, that some landlords are charging exorbitant prices, especially to debuting businesswomen like myself, and I have even talked to some who said they are charging rent in foreign exchange here in Victoria!”

Some new buildings with office spaces in Victoria are still vacant since they are seen as unaffordable, while others which are yet to be completed but said to be more affordable have more demands than the number of offices available!

However, with increases in construction costs there is doubt whether to expect cheap offices like long time back again.
 
Some property-owners calculate their rent based on the amount of time it would take for the building to repay back the investment in their investment policy, but wouldn’t it be better to span one’s repayment period over a longer period of time, and have a full house of tenants, than to have an expensive rent and no or not enough tenants?
Over to you, dear readers and food for thought dear landlords!

By Ivan Hollanda

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