Estate Agents: Top 3 Reasons You Should Encourage Your Clients to List as a Pop Up

Estate Agents: Top 3 Reasons You Should Encourage Your Clients to List as a Pop Up

The winter of 2012 was undeniably hard on the Irish commercial real estate market; a period that is still etched in our minds though the economy has made great strides. Watching the market come back to life is reassuring that we’re coming back stronger than ever, but at the same time, the downturn helped us become more resourceful and strategic. It’s from this experience that the business model behind Popertee was born, as a means to help property owners fill their vacancies and to give small businesses a chance to take hold. Yet, with the recent improvements in the commercial retail sector, it’s worth asking the question, “Can my clients and I still benefit from offering short-term leases on commercial properties?” The answer, of course, is a resounding “Yes!” though you might be surprised to learn why.

1) Payoff May Come Quicker

Although banks have resumed lending to individuals and to businesses on a short-term basis, according to data from Central Bank of Ireland, they still aren’t supporting the long-term needs of entrepreneurs. For those who rely on bank financing for commercial real estate investing, it’s more difficult than normal to obtain funding for subsequent loans. Between this, and the traditional profit-related benefits, it’s highly advantageous to get mortgages paid off quickly. Additionally, short-term leases can be offered between long-term prospects as a means of keeping revenue flowing or as a long-term strategy to make sure property is always earning what the market will bear; a major boon for property owners as rates continue to climb. Although long-term statistics in the commercial sector aren’t available just yet, the Irish Times recently reported that private landlords using similar strategies are paying their investments off in 7 years, versus the traditional 25. That’s money on hand now and helps entrepreneurs reach long-term goals even quicker.

2) Property Values Will Be Maintained

At times when properties remain vacant for an extended period of time, it’s very tempting to accept a reduced long-term offer. While this may provide an instant cash flow and security, it can also devalue the property, making it even more difficult to obtain a substantial offer next time. Worse yet, a single property going at a reduced rate can devalue an entire area, meaning you’d be actively sabotaging your own future and the future of other landlords in your area. Offering a short-term lease, even if you do go slightly lower, won’t cause the same market upheaval, so you’ll do better over time.

3) Irish Businesses Need Your Support

Between Brexit and Ireland’s welcoming corporate tax structure, the country is becoming inundated with multinationals; particularly in and around Dublin. James Nugent, chairman of property advisement firm Lisney recently explored this phenomenon, and the data suggests that it could get much worse for locals. As it stands now, 99% of Dublin’s commercial space is filled, which has caused the rates to surge. International businesses are grabbing up the prime real estate and our local businesses are being pushed out. There are some benefits for the economy overall, but it’s the Irish businesses that have bolstered us and they’re the ones being hurt the most. When you shop local, 68% of the money you spend stays here in the community. When you shop a larger chain, just 43% of the money stays local. You’re also supporting local entrepreneurs, promoting diversity by avoiding “canned” stock, helping to create more local jobs, and even protecting the environment because less shipping is involved.

These are things most of us can agree are beneficial and can be achieved only through giving more local retailers the space they need to do business. Temporary spaces put prime real estate within reach for them, even if the spaces are going at market rate, simply because the risk of a long-term commitment is mitigated.