What is the Cost of a Commercial Property Survey
Investing in a commercial property is a significant decision and understanding the costs involved is crucial. One of the key expenses you’ll encounter during this process is the cost of a commercial building survey. But how much should you expect to pay? In this blog, we’ll break down the factors influencing survey costs, typical price ranges, and why this investment is a worthwhile one.
A commercial survey can cost anything from £1200 for a small commercial unit upwards of £10000+ for a larger unit or portfolio. On average you can pay anywhere between £600 – £1000 for a commercial building surveyor, however, these costs will depend on a number of factors. It is, therefore, reasonable to assume that a Building Surveyor will cost approx. £850 per day. On a small commercial building this may take around 2 days, however, much larger buildings or portfolios could take 10+ days. An executive summary is usually issued within a few days of the commercial building survey to enable the due diligence process to progress and address any urgent issues while waiting for the report to be issued.
Understanding the Basics of Commercial Building Surveys
Before we dive into the costs, it’s essential to understand what a commercial building survey involves. A commercial survey typically evaluates the condition of a property, identifying any structural and fabric issues, compliance with regulations, possible legal issues such as rights of way, and potential maintenance needs. Commercial buildings surveys can be broadly categorised in to pre-acquisition and pre-lease
Pre-Acquisition Surveys
This survey is usually carried out on behalf of the owner as part of the purchasing process and will look at short, medium and long term repair and maintenance issues with budget costs included. This survey will likely draw on specialist consultants such as mechanical and electrical and environmental consultants. Specialist reports such as a drainage survey and an asbestos survey may also be included.
Pre-Lease Condition Survey
This survey is usually carried out on behalf of the prospective tenant prior to signing the lease and focuses more on occupation of the tenant. The commercial building surveyor will review the condition of the premises and this will likely lead to a separate Schedule of Condition appended to the lease. It is of benefit that the surveyor has some understanding of the tenant’s business and their fit-out requirements.
Factors Influencing the Cost of a Survey
Several factors can affect the price of a commercial building survey:
Property Size: Larger buildings typically require more time and resources to survey, leading to higher costs.
Property Type: Different types of commercial properties will have varying levels of complexity, which can influence the survey price. For example a 10,000sqft warehouse can be more straightforward than a 1960s built school with several modifications and highly cellular internally.
Condition and age: This can be a critical factor. Older buildings might need more intensive surveys to assess potential issues that could lead to higher management and maintenance costs, thereby affecting the commercial property survey cost.
Survey Type: As mentioned, the type of survey you choose will significantly impact the cost. A comprehensive building survey will generally be more expensive than a basic condition survey.
Additional Cost Associated with a Commercial Survey
A commercial building surveyor will essentially survey the fabric of the building including the structure, roofs, walls, windows, doors, floors, finishes etc… A commercial building survey will also pass comment on services, regulatory compliance, environmental concerns and some legal issues. This will be a cursory overview from a building surveyor’s prospective, however, where the property increases in size these areas will require separate specialist surveys, such as:
- A building services report, including an air-conditioning Report
- An environmental report
- An asbestos refurbishment and demolition survey.
- A CCTV survey of the drains
Each of the above reports will attract an additional fee that will need to be factored in to the overall spend of due diligence.
The level of detail required in the survey report directly influences the commercial property survey cost. Discussing and refining the scope with your surveyor helps manage these costs effectively.
Is It Worth the Investment?
You might be wondering if the cost of a commercial survey is justified. The answer is a resounding yes. Here’s why:
Avoid Costly Surprises: A survey can uncover hidden issues that could lead to expensive repairs down the line, saving you money in the long run.
Informed Decision-Making: Understanding the condition of a property allows you to negotiate better and make informed decisions regarding your investment.
Peace of Mind: Knowing that you have a thorough understanding of the property’s condition provides invaluable peace of mind, allowing you to proceed with confidence.
Conclusion
When considering the purchase of a commercial property, it’s essential to factor in the cost of a building survey. While prices can vary based on several factors, the investment is crucial for protecting your financial interests. By understanding the typical costs and the value a survey provides, you can approach your commercial property purchase with confidence and clarity.
Investing in a commercial building survey is not just an expense; it’s a wise decision that safeguards your investment for years to come.
