INDUSTRIAL BUILDING LETTABLE AREA PLANS
THE SERVICE REQUEST
When David, a local property developer, was considering the purchase of a standalone industrial building. He was referred to us by the selling agent because no recent lettable area surveys could be found. David engaged us to confirm the advertised area of the building so we suggested creating a lettable area plan that would accurately measure the total area of this commercial building so that a valuation could be confirmed.
When purchasing a property the building area is critical. With most properties if there are no survey accurate plans available the area of the building can be misrepresented. This can happen if someone takes their own measurements or by quoting areas based on an inaccurate pre-build floor plan. This is exactly what we found on this site as the client was considering purchasing this standalone industrial building.
Confirming the area of the building can impact greatly on rental income. We have clients that request lettable area plans from us prior to purchasing multi-level office buildings for this reason. Generally space is leased per square metre so any inconsistencies between a quoted area and actual space, if not found prior to purchase, can have a massive impact on future rental income.
We wanted to provide fast turnaround for this Lettable area plan to help the purchase process. We were on site the day after we received the job confirmation so that we could measure and then draw up the plan as quickly as possible. It also lead to a few surprises with a shortfall in the area vs what was advertised.
THE SCOPE OF WORK
The scope of work for this Lettable Area Plan, or PCA Survey, in Brisbane included;
- The need to determine the Lettable Area of the nominated premises.
- The lettable area had to be calculated in accordance with the guidelines as set out in the Property Council of Australia’s “Method of Measurement”.
Note: This type of plan cannot be used for Lease Registration
- A completed lettable area plan that uncovered shortfall in area of 46m² below what was advertised.
- This shortfall cost the seller around $80K in final negotiations.
- It was discovered that the quoted area was based on an old set of construction plans and not the most current set of drawings.
We find this scenario a common situation where property is advertised with certain space available but it might be based on old plans or it hasn’t been measured recently to substantiate the claims. This can lead to either too much rent being paid or not as much space being available.