Commercial Property Management Midland

Midland is the administrative seat and commercial centre of the City of Swan and is designated a strategic metropolitan centre. The townsite is organised around Great Eastern Highway, carrying eastbound traffic, and Victoria Street, carrying westbound, with commercial activity continuing further east along the highway.

Midland Gate Shopping Centre, built in the 1970s, pulled the centre of gravity toward car based retail, and the original town centre has been working its way back through mixed use redevelopment since. That gives the precinct an unusual mix: an established mall catchment, a highway strip, and an older town centre being repositioned.

Midland is the terminus of its Transperth line, with an extensive bus network feeding the commercial district, which makes it the interchange point for a large eastern and Swan Valley catchment rather than just a suburb.

For more than eighty years Midland was a railway workshops town. The scale of that site, and what has been done with it since, is the single biggest factor in the precinct’s commercial future.

A 326 bed hospital opened on the workshops site in November 2015, replacing the former Swan District Hospital. Curtin University established a Midland campus there. A Western Australian Police Operations Centre also occupies part of the land, and the Midland Redevelopment Authority has overseen portions of the site including museum facilities.

That converts Midland from a retail and light industrial town into one with health, tertiary education and government employment at its core. For a commercial owner the practical consequences are specific. Demand for medical and allied health consulting space is structurally higher than the retail catchment alone would suggest. There is a daytime working population that did not exist before, which supports food and beverage and services. And professional tenants who serve those institutions now have a reason to be in Midland rather than commuting from elsewhere.

It also means the precinct is still moving. A lease term and a rent review mechanism set against Midland as it was will look wrong against Midland as it is becoming, and that is worth thinking about at heads of agreement rather than at expiry.

The mall catchment, the highway strip and the older town centre behave differently, and a property should be positioned against the one it is actually in.

For consulting and professional space this is the main driver of demand, and it should lead the campaign where it applies.

Retail premises of 1,000 square metres or less are generally covered by the Commercial Tenancy (Retail Shops) Agreements Act 1985, which changes disclosure, requires itemised operating expenses and gives a minimum term.

Buildings in the original town centre can predate current fire, accessibility and services standards, and an upgrade obligation is better identified before a lease than during one.

Mixed use redevelopment means what is allowed on one site is not a guide to the one next door. The position is checked with the City of Swan for the specific address.

Leases are administered against their own dates, so rent reviews, option windows and expiries are prepared for in advance. Under a retail lease covered by the Act the landlord must notify the tenant six to twelve months before an option has to be exercised, and that notice is diarised rather than remembered.

Outgoings are budgeted before each year, billed as the leases allow and reconciled at year end. Where the Act applies the operating expenses have to be itemised in the lease and the tenant can ask to see the invoices behind them, so the records are kept to that standard from the outset.

Maintenance runs through contractors we use repeatedly. In older town centre stock the inspection regime does more work than it does in newer buildings, because services, fire compliance and unauthorised alterations are where problems accumulate. Inspections are scheduled and reported with photographs.

Owners receive monthly statements and an end of financial year package. Every property has one senior manager attached to it. Where the question is whether to hold, refurbish or sell rather than how to run the asset, our advisory service covers that on its own.

Medical specialists, allied health, pathology and dental practices drawn by the hospital. Education and training providers and the services around the Curtin campus. Government and agency tenants, and the legal and professional practices that work alongside them. Retail and food and beverage serving both the mall catchment and the daytime working population. Trades, automotive and small industrial businesses in the older stock and along the highway.

The mix is broader than most outer centres, which is an advantage for an owner because a vacancy has more than one possible tenant. It also means the marketing has to be deliberate, because a property presented to the wrong group of those tenants will sit.

Incentives move with the market and the quality of the space. We assess what is reasonable against what is actually being agreed at the time, and settle the heads of agreement before the lease is drawn.

A leased Midland property is bought on income, priced against the passing rent, the lease terms, the tenant and yields on comparable sales. Medical and government related tenancies are generally viewed as the stronger covenants here, for the same reason they are elsewhere.

A vacant building is often bought by an owner occupier, and Midland has a real pool of those, particularly practices and trade businesses buying their own premises rather than leasing.

Buyers will want the leases and variations, a tenancy schedule with the expiry profile, outgoings budgets and reconciliations, building and fire compliance records, the permitted use and zoning position, and for older or former industrial sites any environmental history. Where a property sits close to redevelopment land, the planning position around it is worth setting out too, because a buyer will ask.