Commercial & Industrial Property
Commercial and industrial property can offer investors significantly better yields than prime residential, albeit usually with a lower rate of capital growth. The economic downturn has seen values of commercial and industrial properties drop as tenants have downsized or gone out of business, but with the economy in the United Kingdom having now turned the corner, significant opportunities are starting to appear.
Indeed, there is a strong link between UK Gross Domestic Product (GDP) and the Commercial Development Activity Index and in the last quarter of 2013, this index reached the highest average in its history. The total level of commercial activity increased in December for the 16th consecutive month.
Looking at the different sectors, growth in office, retail and leisure was subdued, new build has been increasing for the last six months and industrial/warehouse and refurbishment activity have all been increasing for the last 16 months. The rest of the UK has shown stronger growth than either London or the South East.
There are comparisons between buy-to-let commercial and industrial property and buy to let residential but typically, yields will be higher in the two former catorgries than residential. The length and terms of the lease, with the strength of the lessee, are crucial to this type of investment. For further information contact us to discuss your requirements without obligation.
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