Investment Partners

How to diversify your portfolio with commercial property investment

Commercial Property Investment
Property Moose
Written by Property Moose

When comparing asset classes, there appear to be many potential benefits of investing in property. As property is often utilized as a long-term investment to optimize returns, we believe the UK is an excellent location for commercial property investment. Which? predict that an average lease length for commercial property is about 8 years. (1) The asset class, specifically the subdivision of retail property investment, has received a lot of attention recently.

Spotlight on retail property investment


We decided to take a look at retail property investment, on account of Savills’s recently published report, titled ‘UK Shopping Centre and High Street Spotlight.’ (3) Some of the main points discussed were:

  • In total, £3 billion was invested into UK shopping centres in 2016.
  • There was some hesitancy around the asset class, largely impacted by wider themes, such as the EU referendum. The shock result led to a quiet Q3, however, by Q4, investors had re-entered the market, and business returned to usual.
  • Last year, the high street shop market experienced over £4.5bn of transactions, which is the highest since 2010.
  • Non-domestic investors increased their presence in the sector by a margin, accounting for £1.35bn of all transactions.
  • Around £1bn of stock is ‘currently being prepared for sale, in addition to the £545 million of stock in the market which as carried over from 2016.”

Thoughts from industry experts 


An investment director at Investec, Justin Simler, highlighted why he believes commercial property is the “best way to invest in property in 2017.” Specifically, “destination shopping centres.” He explained that a time of economic uncertainty and rising inflation, “people still need the corner shops and they still need the destination shopping centres, such as Westfield, the guys that [get] squeezed are the ones in the middle.”  (2)

Another area believed to be booming is industrial property investment. He explains, “the warehouses that companies such as Amazon want right now are nothing like the warehouses of the past, which were just big sheds with corrugated iron roofs, what they want is more bespoke and more hi-tech. The companies that own those warehouses therefore are probably in a position where they have pricing power as inflation rises.” (2)

Andrew Gardiner, CEO and Founder of Property Moose said, “In 2015, councils did not purchase a single shopping centre, but in 2016, they invested £386.7 million in the asset class across 10 different schemes. The interest around retail property investment speaks for itself, though unfortunately, unless you have a sound amount of capital, it can be near impossible to enter the market.” (3)

At Property Moose, we understand the importance of a diversified portfolio, which is why we offer a variety of investment types, from buy-to-let, buy-to-sell, private equity developments and loans.

Several of our buy-to-let opportunities are in fact mixed used properties; a combination of residential and commercial. To name a few, SPV 4 is both a popular café and a 2 bedroom flat. SPV 30 is a mixed-use commercial & residential property in Saltburn-by-the-Sea, North Yorkshire. SPV 48 is a mixed-use investment opportunity in Hartlepool, County Durham, consisting of a commercial unit on the ground floor and a two storey residential unit above. SPV 54 is a Grade II Listed mixed-use property on one of the most prestigious roads in Derby City centre, East Midlands.

You could potentially benefit from investing through us in this regard, as traditional commercial property can be quite expensive. Indeed, “commercial properties cost millions of pounds to purchase or build and can command huge rental incomes but, in most cases, they’re impossible for smaller investors to buy outright.” (1)

Our minimum investment is just £10, and although the properties mentioned above have been fully funded, you might be able to find shares for sale on the secondary market. Our secondary market is our online trading platform exclusive to Property Moose members.

Please register with Property Moose to see their latest opportunities.

Written by Jenna Kamal at Property Moose

Sources

  1. http://www.which.co.uk/money/investing/how-investing-works/guides/asset-classes-explained/commercial-property-investment-explained
  2. http://www.whatinvestment.co.uk/investec-the-best-way-to-invest-in-uk-property-in-2017-2553262/
  3. http://pdf.euro.savills.co.uk/uk/commercial-retail-uk/uk-shopping-centre-and-high-street-q4-2016.pdf

Disclaimer and Legals

Property Moose does not provide any advice in relation to investments and you must rely on your own due diligence before investing. Please remember that property prices can go down as well as up and that all figures, rates and yields are projections only and should not be relied on. If in doubt, please seek the advice of a financial adviser. Your capital is at risk if you invest. This post has been approved as a financial promotion by Resolution Compliance Limited.

Property Moose is a trading name of Crowd Fin Limited which is an Appointed Representative of Resolution Compliance Limited which is authorised and regulated by the Financial Conduct Authority (no: 574048).

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Property Moose

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