Last week I talked about the general economic conditions under which the commercial property sector has been operating over the last year or so. As mentioned, commercial property does not operate in isolation to those conditions. When tenants' businesses are affected by difficult times, vacancies rise and growth becomes severely constrained.

Typically (although not always), the well-located premises, be they industrial, retail or office, will weather any downturn much better than secondary properties. The reason is fairly simple - because they are usually in prime locations and they tend to be tenanted by quality tenants who are generally better positioned to get through tough economic times.

Thus, with office, the A-grade office buildings, they are typically tenanted by branded tenants, top law firms and accountancy practices for example. Again, with retail, the prime properties are usually in the top pedestrian count areas where you will find the national tenants in occupation. Brands such as Michael Hill Jewellers, Glassons, Whitcoulls
and so forth will always want to occupy space where pedestrian numbers are highest.

The top industrial tenants will also want profile and easy access to major arterial routes. And so, there it is in all of its glorious simplicity, the first and most important ingredient to what makes a good commercial property - location.

After the break, I will drill down further into the specifics of each class of property to see what other ingredients we need to add. Until then, have a great Christmas and enjoy the break.