What are the three types of commercial property markets?
One of the most important factors when considering the suitability of a commercial property has always been its location. There are three types of commercial property markets used to describe the quality of a property’s location: Primary, secondary and tertiary.
These terms are considered by investors when choosing a commercial property market for investment. Other factors they will research include job and population growth of an area, the price of housing and supply and demand, as well as what their potential return on an investment is likely to be. However there is not an exact definition for these terms so there can be a very diverse range of properties in each category.
In the retail sector a primary location is a shop unit in a high density area such as a high street or the main area of a shopping centre. A secondary shop is one that is within walking distance of a main street and a tertiary is an area on the outskirts of a town or city or a rural location.
Savills have previously calculated that 46 per cent of UK shopping centres are classed as secondary. They suggested in order to attract customers and retailers these centres have to provide more of an experience and include social, public and community spaces.
For the office market location considerations will need to address whether employees with the necessary skills are to be found in the area, how good communication links are and if transport links are good to get the people into the office. With the rise of hybrid working the quality of the office itself has become more important.
Secondary offices are often older premises but still a specific office building which may not appeal to a brand who wants their premises to reflect their company. They are more likely to be used by smaller companies
Tertiary offices are often housed in a converted building and are not in a desired location.
Because of sustainability and ESG, (that is Environmental, Social and Governance standards which measure how a business’s impact on society, the environment, and how transparent and accountable it is.) Savills recently noted that there is a widening gap between the demand for primary and secondary office property. And that this is reflected in rent increases in sustainable offices.
When you search NovaLoca for commercial property you can set a radius search for a location starting from 1 mile to 100 miles in order to search all types of commercial property markets.
