Why it is difficult to classify business center and real estate in general
The real estate market is a profitable investment option. But despite its prospects, there are moments that need to be improved and certain standards created. To a greater extent this concerns the commercial segment. It is difficult for experts to determine what class a business center belongs to and real estate may be undervalued. That is why it is important to create unified modern standards, which will improve the level of service at the market.
At present, for commercial and office objects conditional standards are applied, which are common in other countries. Unfortunately, there are no clear criteria that are established at the legislative level, based on which a specific class of business center or warehouse space can be assigned. The lack of rules complicates the work not only for developers, but also for tenants. Such problems are observed in the commercial segment and also in the residential segment. It is difficult to determine exactly whether the object belongs to the economy, comfort or elite class.
The only norms that can be relied upon are the rules for equipment of an employee’s workplace. They are defined in the labor legislation and assume that 5 square meters of space should be allocated for one person. The rules also regulate lighting and the level of humidity and temperature in the room. But in practice, neither developers nor employers who rent office space take these issues into account. There are no controlling bodies that would deal with these rules. The only monitoring that is carried out for the object after its commissioning is its compliance with the project documentation. All the rest is carried out at the request of the business center owner or tenant.
The office real estate market needs modernization in order to develop further. It is necessary to introduce standards that will meet modern requirements and needs of participants. This will allow to clearly define the sphere of activity, the range of responsibilities of developers and tenants, and to reduce the number of fraud schemes.
Now, without officially fixed standards, the owners determine the business centers’ criteria themselves. Small cosmetic repairs, video surveillance system – and in their opinion, the object from class C became B.
Uncertainty of norms affects the analysis of the general state of the market. It is difficult to calculate exactly how many objects belong to one type and how many to another. Participants focus on conditional standards but they are not ideal and often distorted anyway.
Three categories are used for commercial real estate. The highest class is A; it includes objects with modern design, introduction of digital technologies and management systems.
Class B includes real estate that is 7-10 years old. Some time ago it was defined as A, but morally outdated.
Class C includes objects that were built in Soviet times and can not offer tenants the conditions that modern business centers.