Business properties with commercial appeal
The retail sector may be struggling to pick itself up following the recession. But there are still plenty of profitable non-residential options for investors. Here, Zoe Dare Hall offers advice for landlords looking to buy a commercial property.
In the world of commercial property, Ray Bloom is a young star. Now aged just 25, four years ago he bought the Mayfair-based commercial property company John D Wood. Has since doubled turnover to more than £2m. He is now developing a UK-wide network of franchises. It is branching out into commercial property in Egypt.
Not everyone seeking to enter the market can emulate Bloom’s level of ambition or success. But in trying to find that first step on the commercial ladder, the trick, says Bloom, is timing.
“If you buy well, fix the building and then sell smart, you will be successful. In today’s rather stagnant market, where growth is difficult to achieve, the key is to be a good manager of the property and work closely with your tenants, who are your customers.”
Unlike the residential market, commercial property is mainly income-driven. There are three key sectors – offices, industrial and retail – and all are potentially available to private investors, who own around 12 per cent of UK commercial property, according to Christopher Reeve, partner at the property consultancy Bidwells. “It sounds small,” he says, “but it is a significant and growing sector when you bear in mind the average commercial property investment lot size is more than £1 million.”
The timing is good. Commercial property is on the turn and individual investors need to find smaller opportunities off the radar of big commercial companies and pension funds.