Buying commercial property can be a sensible option for those who run a small or medium-sized business. In fact, at a time when other types of property investment, such as the buy-to-let sector, are looking less attractive than a few years ago, it could be a shrewd move.
“The commercial property market is a landlord and investor-friendly environment with long leases of between 10 and 20 years commonplace,” says Richard Merryweather, joint Head of UK Investment at Savills.
Yet the commercial sector, like the residential sector, is not without its risks. “Commercial property typically provides a higher yield than residential within a similar area,” explains Tom Grounds, Research Partner at Knight Frank. “In 2013, 2014 and 2015, the commercial property market provided double-digit returns. But those results were well above long-term trends. So investors in commercial property should be wary of chasing unrealistically high returns.”