How good (or bad) design can impact a property’s potential yield

From his perspective, “design and yield are very much interdependent.”

What that means is that when investors are looking at a property to invest in, they should ask more than just what the expected yield will be.

Explaining further, Mr Alexander-Hatziplis advised that questions such as whether the building was designed with yield in mind “are critical”.

Such questions include: “What attributes does it have that will add additional yield?” “How will those elements protect the income if another property is developed next door?”

He notes that “tenants of all types want more than four walls and a roof over their head.”

“You have to understand what motivates demand for premises in each area,” he advised investors.

So what design elements can protect (or boost) yield?

“Elements that can increase yield include good lighting, with natural light where possible.

“Good internet and mobile phone reception in all parts of the building are also essential.”

“Other key designs for yield elements include space to bring people together, to network [and to] create and these spaces can also be used for socialising. This might be a dedicated space, such as a café, or areas for each prospective tenant,” he shared.

In addition, Mr Alexander-Hatziplis flagged environmental and associated ESG considerations as worthy of note, calling solar panels a “must” for most developments in 2023.

Alongside solar is oftentimes the requirement for battery storage, which in turn poses its own questions, including “Can the roof of the development account for these?” “Will there be enough to power the project?”

Just as good design can prompt strong yields, Mr Alexander-Hatziplis has warned that bad design can have the effect of lowering yields.

Design choices that can dampen investment prospects include poor security, unconsidered arrangement of apartments, excessive hallways and lack of solar access.

Designing for yield is a concept with which Mr Alexander-Hatziplis’ co-founder, Marie-Claire Alexander-Hatziplis, wholeheartedly agrees.

From her perspective, “there is much more to designing a building than simply looking good.”

“Another key design aspect for increasing yield is curb appeal. ‘Is the building attractive from the street, the entrance for visitors as well as employees working there?’ or ‘Will the next one down the road be better?’” 

“Another key design for yield enhancers is the ease of maintaining the property — is it easy or hard to maintain? This is a key feature of the design and should be addressed from the initial stages of planning,” she advised would-be builders and developers.