commercial property

Is this a good time to invest in commercial property?

A number of property funds are predicting double digit returns and forecasting a prosperous future for this sector of UK property investment. In the last few years both the institutional funds and individual commercial assets have performed well providing good yields and return on investment.

On the timing of entering the market a leading UK fund manager Mr Shaw has advised “There is competition for a limited number of quality assets,” he said, “As an increasing number of investors seek exposure to these assets. Average property capital values remain about 30pc below the previous peak recorded in 2007.”

Reports have stated that the prosperity of commercial property in the UK is now attracting the attentions of institutional investors from overseas, such as pension funds in Europe and Asia. UK commercial projects have suffered a similar fate to residential property with projects being stopped or delayed as a result of the recession and there is an argument that the lag in building projects during the recession has resulted in pent-up demand for office and retail space as the recovery gains strength.

The key is the area, there are certain areas where the economic recovery is not so strong but in other areas there has been investment in the infrastructure and regeneration. As with any investment good research is essential before moving forward. You need to also match the type and size of commercial asset to the right area too. One of the UK’s leading property trust fund managers has confirmed there are opportunities outside of the Capital.

“Property in the North West is offering yields of about 6pc, which is great value when you consider that foreign investors are also looking to buy outside London. There has been a lot of quality property development in Liverpool and Manchester in recent years, so outside London they are two of the best areas.”

One hurdle for investors looking to diversify their property portfolio into this potential money making sector of the market has been the capital input i.e. investors would need to look at an office block or similar in its entirety. This is now not the case with investing in commercial property becoming more accessible with offices and commercial units now available as individual like apartments within a residential block. Investment Property Consults have some exciting affordable commercial opportunities in Manchester and Liverpool at less than £100K. We also have access to more considerable schemes including mixed schemes for those looking to invest more extensively in this sector.

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