Investing in Commercial Property

With the likelihood of decreasing interest rates making investment accounts less attractive small scale investors should consider both commercial and residential property as a potential alternative investment medium. Well located commercial properties let to good tenants provide excellent investments free from the management complications that can blight residential properties. Acting on behalf of private investors we recently carried out a nationwide search for suitable investments of circa £500,000.

A retail property has now been purchased in Doncaster Town Centre providing a net yield in excess of 8.5%. Whilst the property is now occupied by a local coffee shop/restaurant operator, the building was originally let to The Bally Shoe Co. ensuring that the rental income is underwritten by a substantial PLC covenant throughout the lease term to 2010. The property is located in a central High St position opposite a new development thereby providing security for rental growth and future lettability. Buying commercial property investments is a complicated exercise and consideration must be given to location, quality of tenant, length of lease and detailed lease terms. A well located property let on a pre 1995 lease to a blue chip tenant is the ultimate prize of a thorough search.