Are you facing the complex task of acquiring a commercial property or maximizing its potential usage? Many investors and owners underestimate the various aspects, from site analysis to development costs. This article provides you with a detailed overview and practical strategies for making informed decisions.
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The topic briefly and concisely
A detailed examination of the development plan and land register is essential before purchasing a commercial property, to clarify usage possibilities and legal restrictions.
The ancillary costs involved in purchasing a commercial property (such as property transfer tax, notary, broker fees, etc.) can amount to 10-15% of the purchase price and must be carefully calculated.
Development costs for connections (water, electricity, road) can be significant (often €5,000-€15,000+) and should be inquired about with the local council early on.
The acquisition and development of commercial properties represent a significant business decision that requires careful planning. Given rising land prices and complex legal frameworks, a comprehensive understanding of all relevant factors is essential. This article explores the entire process – from the initial selection and purchase through to the optimal use and development. You will gain valuable insights into how to avoid common pitfalls and ensure the long-term success of your investment in commercial properties. With the right information, you can turn challenges into opportunities and lay the foundation for sustainable growth.
Define commercial plots and identify potential
A commercial property is an area designated primarily for commercial or industrial purposes according to the development plan. In Germany, the precise definition and permissible use are regulated by the Land Use Ordinance (BauNVO) and the respective municipality’s development plan. Municipalities categorize four main types of building land in the land use plan: residential areas, mixed-use areas, commercial areas, and special areas.
The development plan specifies in detail the type and extent of land use, for instance through building envelopes and maximum building heights. For companies, the land category specified in the development plan, such as commercial area (GE) or industrial area (GI), is of critical importance. Early examination of these plans prevents costly planning errors and ensures the feasibility of your project. Understanding these fundamentals is the first step towards successful investment and use of commercial properties. The right property size and location are other critical factors that significantly influence future success.
Mastering the purchasing process of commercial properties
The purchase of a commercial property is a multi-stage process that requires careful preparation. A thorough location analysis is essential to assess its suitability for your specific business needs. Consider factors such as transport connections, proximity to customers and suppliers, and the region's future development potential. A detailed budget plan that includes all ancillary costs is equally indispensable.
Legal review (Due Diligence) is another critical step. This includes checking the land register to identify charges and restrictions, as well as a thorough examination of the development plan. It is advisable to enlist experts such as specialised estate agents or lawyers for this complex process. Professional purchasing advice can protect you from costly mistakes and ensure the long-term value of your investment. Remember, a contract for the purchase of land must be notarised to be legally valid. Therefore, the careful review of all documents and circumstances before signing is crucial for the successful acquisition of your commercial property.
Precisely calculate the costs when purchasing commercial property
The total costs for acquiring a commercial property consist of the pure purchase price and various additional costs. These additional costs can constitute a significant portion, often between 10% and 15% of the purchase price. The most important additional costs include the property transfer tax, which varies by federal state (between 3.5% and 6.5%), as well as notary and land registry fees, which together can amount to about 1.5% to 2% of the purchase price.
If an estate agent is involved, agency fees will apply, which vary regionally and often range between 3.57% and 7.14%. In addition, specific costs may arise for commercial properties:
Surveying costs: If the property boundaries are not precisely defined, costs of 1,000 to 1,400 euros may occur.
Soil analysis: To check the buildability and any potential contamination, costs often range between 1,000 and 2,500 euros.
Development costs: For connection to public networks (water, electricity, sewerage, roads), which depending on the municipality and effort can amount to 5,000 to 15,000 euros or more.
Demolition costs: If there is existing development, demolition costs can range from 10,000 to 25,000 euros.
A detailed cost breakdown before purchase is crucial to avoid financial surprises. Knowing these cost blocks precisely enables solid financial planning.
Optimize evaluation and financing of commercial properties
A well-founded valuation of your commercial property is the basis for successful price negotiations and solid financing. Various factors influence the value, including location, size, layout, buildability according to the development plan, and the degree of development. For commercial properties, the income approach is often used, as the intention to generate profit is paramount. The flexibility of the property for different commercial uses plays a central role.
When financing a commercial property, you should consider various options. Bank loans are common, with the property's loan-to-value ratio being an important factor in your company's overall financing concept. Early clarification of financing options and realistic budgeting are critical to success. Remember that banks generally expect the ancillary costs to be financed from equity capital. A professional valuation, such as that offered by Auctoa with AI-supported analyses, can help you determine the fair market value and optimise your financing strategy. This creates a strong negotiating position and security for your investment.
Strategically unlock the potential uses of commercial properties
The optimal use of a commercial site largely depends on the planned type of business. The Land Use Ordinance (BauNVO) defines different types of areas such as commercial areas (GE) or industrial areas (GI), which allow for various uses. Typical uses include production facilities, storage and logistics halls, office buildings, or retail spaces. The specific requirements for infrastructure, noise emissions, or transport connections vary significantly depending on the type of use.
A crucial aspect is the flexibility and adaptability of the site. Can the site accommodate mixed-use (e.g., production and office)? Are future expansions legally and spatially feasible? Examining the long-term development opportunities and alternative usability can significantly increase the value of a commercial property. Careful planning of the needs-based infrastructure, including employee and customer parking, is important right from the start. Analyzing these factors helps to exploit the full potential of your commercial location.
Minimise risks when purchasing and developing commercial properties
The acquisition and development of commercial properties involve various risks that require proactive management. A central element is the early identification and assessment of potential risks. These include unclear buildability, soil contamination, unexpectedly high development costs, or later usage restrictions due to changes in the development plan. A comprehensive due diligence examination covering legal, technical, and economic aspects is therefore essential.
The Gabler Business Dictionary emphasizes that risk management aims to ensure survival and optimize the risk-return profile. For commercial properties, this means:
Obtaining a soil report to clarify soil conditions and possible contamination.
Thorough examination of the development plan and land use plan for current and planned regulations.
Resolving all development issues and costs with the responsible municipality.
Protection against unforeseen cost increases during the development phase.
A systematic risk management reduces the likelihood of negative surprises and protects your investment. The use of digital tools like Auctoa's ImmoGPT-Chat can help you quickly clarify initial questions and identify potential risk areas. This supports informed decision-making from the very start.
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The purchase and use of commercial properties are complex undertakings that require a strategic approach. From the initial analysis of the development plan, through detailed cost calculations including all ancillary costs, to a thorough evaluation and solid risk management – every step must be carefully considered. Compliance with legal frameworks, a precise examination of usage possibilities, and forward-looking financial planning are crucial for the long-term success of your investment. Through careful planning and the incorporation of expert knowledge, you can fully exploit the potential of your commercial property and create sustainable value. Use data-driven assessments and consultations to base your decisions on a solid foundation and achieve your business objectives.
Additional useful links
Statistisches Bundesamt provides detailed information on construction prices and the property price index.
Statistisches Bundesamt offers an interactive graphic on commercial rent indices.
Deutsche Bundesbank presents its indicator system for the commercial property market.
BORIS.de is the central joint land reference value portal of the German federal states.
IHK München und Oberbayern provides information on commercial properties in the region.
ZIA Zentraler Immobilien Ausschuss is the leading association of the German real estate industry.
BBSR (Bundesinstitut für Bau-, Stadt- und Raumforschung) provides information on the ZIA taxonomy for economic and commercial properties.
KfW (Kreditanstalt für Wiederaufbau) presents funding programs for energy-efficient non-residential buildings.
Wikipedia provides a comprehensive article on commercial properties.
FAQ
What role does the development plan play when purchasing a commercial property?
The development plan is crucial as it legally stipulates how a commercial property may be built and used (e.g., type of business, building heights, building lines). Early inspection is essential.
Can I purchase a commercial property as a private individual?
Yes, in principle, private individuals can also acquire commercial properties. However, it is important to review the specific usage requirements and tax implications, especially if commercial use is planned.
What is meant by the third-party usability of a commercial property?
The third-party usability describes how flexible a commercial property or a building on it is suitable for different commercial users or uses. A high third-party usability generally increases the value.
What financing options are available for commercial properties?
Financing is usually provided through bank loans. The creditworthiness of the buyer, the equity (often required for additional costs), and the lendability of the property play an important role.
How can Auctoa help me with commercial properties?
Auctoa offers AI-powered real estate valuations and strategic consulting. Our ImmoGPT chat can address initial queries and assist you in better assessing the potentials and risks of commercial properties, enabling you to make informed decisions.
Do I always need to have a soil survey conducted for a commercial property?
A soil survey is strongly recommended, especially if there is a suspicion of contamination or challenging soil conditions. It provides insights into the load-bearing capacity and potential contamination, which can significantly minimise cost risks.
