Commercial property investment has traditionally been the domain of the professional institutional investors: insurance companies, pension funds and church commissioners.
But recently the benefits of commercial property investment have proved profitable to private investors, especially those who have experienced the benefits of buy-to-let and want to diversify their property portfolio.
There are three categories of commercial property:
Retail property – including shopping centres, supermarkets, retail warehouses and high street shops
Office property – purpose-built for businesses, these often require installation of high-speed internet and other services essential to businesses
Industrial property – such as industrial estates and warehouses.
The UK benefits greatly from a longer lease structure compared with Europe and the US. Typical lease length in a Nottinghamshire office is generally between 9 and 12 years, while the average lease length across all of the UK is approximately 8 years.
This is much longer than what you would get from a residential property, which generally has leases of six months to a year.
This structure potentially offers more security relative to the returns offered by shares, as income is guaranteed at a set level for an extended period of time.
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