Maximising revenues and property values for office landlords: the ultimate how-to guide

The commercial real estate sector is experiencing massive change. As a result, many office landlords are facing challenges that threaten the stability of their income and property valuations. 

Although traditional offices were once at the pinnacle of real estate investment, this status quo has been disrupted by huge shifts in working patterns, businesses’ office needs, and high inflation and interest rates. 

New data from BNP Paribas shows that, on average, London office values have dropped 17% since summer 2022, having fallen in each of the past five quarters. Valuations have been cut as the debt owed on the commercial properties has become more expensive. 

What’s more, occupancy rates in traditional office spaces have fallen considerably, weakening this once-stable revenue stream. Meanwhile, however, demand for flexible workspaces continues to soar as businesses seek more modern workspace solutions and are reluctant to commit to multi-year leases following the pandemic.

To boost revenue and property values alike, it is crucial that office landlords listen closely to their tenants, reflecting on their evolving demands and responding by modernising their approach.

“Success comes from listening to your customer,” as the famous entrepreneur Richard Branson once said. It is a particularly pertinent quote for the office market today. 

What can office landlords do to get back on top?

To adapt to the evolving demands of the market and maximise opportunity, landlords could explore three key changes.

One change to consider is embedding high-spec technology into commercial properties. Remaining competitive means landlords must invest in solutions that launch their spaces into the modern age to address modern workforce needs. 

Community apps facilitating better tenant experiences and connectivity – such as the state-of-the-art app offered by infinitSpace – and high-speed internet are some examples. Such upgrades to a workspace’s infrastructure justify premium rental rates, increasing revenue and in turn valuations, as well as attracting innovative occupants.

A second area of exploration is investment into mixed-use developments. Take, for example, infinitSpace’s latest project, beyond Republica, a brand-new development in Amsterdam that integrates workspaces among a range of retail, residential, and recreational facilities. 

This combination builds an enriching environment for tenants, as well as creating a sense of community. What's more, developments with fantastic facilities like these generate income from multiple sources, and drive up the desirability of an area, which in turn boosts property values.

Thirdly, of course, there is always the option for office landlords to introduce flexible workspaces into their buildings. 

Increasing demand has created exciting opportunities for landlords, and the market is ripe for landlords to tap into this expanding market by upgrading some of their offices and other commercial spaces into flex space. 

Making the most of existing assets through redevelopment, this diversification is the ultimate strengthener of revenue streams; not only does it stabilise revenue by spreading risk across several tenants, but it could also enhance revenue by granting landlords access to a wider customer base, from budding entrepreneurs to SMEs and large corporations. 

And while it could initially appear to be a challenging undertaking for landlords, partnering with a flexible workspace provider like infinitSpace helps streamline this process. With our industry expertise, flexible workspace projects can be easily managed in a stress-free, cost-effective manner. From conception and development to the eventual operation of the workspace, we are equipped to handle it all.

For landlords, thriving amid evolving work dynamics, economic conditions, and market expectations means getting ahead of the pack by being innovative, agile and embracing change. By incorporating modern tech solutions and diversifying their revenue streams through flexible workspaces and mixed-used developments, landlords are well-positioned reap the benefits of increased demand, maximised revenues and the steadfast appreciation of assets.

Want to start boosting your own revenues and property values? Get in touch with the infinitSpace team today!