Look before you leap

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buying a commercial property dental practice

This article is sponsored content brought to you by BOQ Specialist.

Buying a commercial property can set up dental professionals for life—if they get it right. There are a multitude of factors to consider to ensure you get a property that is fit for purpose, not only today, but is also able to deliver long-term value. According to our finance specialists, here are some things to weigh up. 

Location, location, location

A commercial area that seems perfect today could lose its lustre in the future. However, assessing the strengths of a suburb and checking out past business trends in the area can minimise any risks. Is the population on the rise? Does the site have access to public transport? Are there anchor tenants in the commercial zone or planned development within the area? “Practices located near shopping precincts with a strong anchor tenant will give the greatest exposure to foot traffic” says Nicole Balneaves, Senior Product Manager at BOQ Specialist. She adds that buying on a site with good street frontage and the potential to erect eye-catching signage can make a real difference. 

The state of the economy

Before signing on the dotted line for a commercial property, consider how the economy is performing. 

Commercial property owners are more exposed to financial ups and downs than residential owners because people always need a place to live, whereas demand for high-end service providers can wax and wane. A sudden downturn could reduce an owner’s personal income, and limit their capacity to lease additional space to other businesses. Nicole recommends speaking to financial experts to gain an understanding of current economic and market trends.

Support services and accessibility

A second-floor dental clinic without a satisfactory lift is a sure turn-off for potential patients, especially the elderly, disabled or parents with children. “A practice needs to be easily accessible and accommodating to the needs of your patient base,” Nicole says. 

Other factors such as parking, security and access to IT infrastructure should also be part of the equation. Superior and well thought-out property facilities can aid your practice in the day-to-day, but also could ultimately contribute to a higher potential resale value of the site in the future as well.

Existing leases and tenants

An investor in commercial property should understand their legal obligations when it comes to taking on an existing leasing arrangement when acquiring a property. If, for example, a tenant’s current leasing arrangement or terms are inconsistent with market norms, this may impact profitability on the property. Conversely, if the leases of high-paying tenants are about to expire, the new owner runs the risk of purchasing suites that could soon be vacant. 

“So it’s important to look at the tenancy demand and vacancies within an area, including the profiles of the existing tenants,” Nicole says.

Growth goals for your practice

Nicole says prospective commercial property owners should understand the growth plans for their practice before agreeing to a purchase. “Some practitioners may currently be operating out of a one or two room practice, but their goal might be to expand in the future,” she says. “Does the property you’re looking at accommodate those growth plans?” 

Failing to account for the anticipated growth could result in significant costs should a bigger site be required within a few years, particularly if your practice requires purpose-built fixtures and fittings.

“We have the industry knowledge and can help clients ask the right questions,” Nicole says. “This is what we do every day.” 

You can find more about BOQ Specialist’s commercial property loans and limited time offer by contacting your local finance specialist on 1300 160 160 or visiting boqspecialist.com.au/commercial


Disclaimer

The issuer and credit provider of these products and services is BOQ Specialist – a division of Bank of Queensland Limited ABN 32 009 656 740 AFSL and Australian credit licence no. 244616 (“BOQ Specialist”). Terms, conditions, fees, charges, eligibility and lending criteria apply. Any information is of a general nature only. We have not taken into account your objectives, financial situation, or needs when preparing it. Before acting on this information, you should consider if it is appropriate for your situation. BOQ Specialist is not offering financial, tax or legal advice. You should obtain independent financial, tax and legal advice as appropriate.

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