Commercial Property Investment

Commercial property can be described as any type of property used for non-residential purposes. It may be shops, offices, warehouses and factories, or even much larger investments such as ports and airports. The main attraction of commercial investment is the right to receive rent from those who will use the property for their business.

Throughout the World commercial property is seen as a cornerstone of may large investment or pension funds. It is a sector of the investment market that has faired well in recent years and shown good long-term returns. It is, however, part of the property market that requires specialist knowledge and advice for the investor to get best returns.

The law that governs commercial property in the UK, and abroad, is quite different from that governing residential property and residential property investment. Traditionally tenants take much longer leases that those undertaken by residential tenants – many will consider a 25-year lease with rent reviews every five years. At the end of the lease the tenant may still have rights under Landlord & Tenant Law to remain in the premises. Expert knowledge and advice is needed for this specialist field.

In commercial property the nature of the tenant (almost always called by commercial property investors “the covenant”) is of vital importance. An identical building with an otherwise identical lease might have two totally different values if occupied by two different covenants – it is the nature of the covenant that will govern value as much as the bricks and mortar and the commercial property advisor needs proper advice with regard to this.

There is always a busy market for properties let to good covenants such as the government or big,household name companies. The investor will get an income in the form of rent for a period fixed by the length of the lease with the hope that the rent will rise due to the rent reviews. The covenant will usually be responsible for all repairs and insurance, and will be expected to return the building to the owner at the end of the lease in good condition. Such good investments are usually priced accordingly. Properties let to less well regarded covenants, perhaps on poorer buildings, may appear to be better value, but the lower price will reflect greater risk. Whatever the covenant, and whatever the building, we pride ourselves on expert advice for our clients.

Successful investment in commercial property needs proper consideration of both building and covenant so that any opportunity for profitable asset management is identified and properly executed. The management of commercial property is quite different from that required for residential property as it is frequently from the management of the property that opportunities will be presented or identified.

Commercial property is an asset class that can be included in Self Invested Personal Pensions. We can advise on any property aspect with regard to this quite specialised area of legislation in conjunction with our clients’ properly qualified financial advisers. We can also advise on the development and management of commercial property in whatever form.

We have access to all sorts of commercial property from corner shops to international five star hotels, from lock up industrial units to mixed portfolios worth hundreds of millions of pounds. The nature of our property availability changes daily and we can always source, frequently off market, commercial property investments throughout the UK. If you want to find what we have available today – or register for information on future opportunities, then please contact us for advance information using the box on the left, or contact us for currently commercial property investment opportunities.