Commercial property investors may wish to look outside of London
Released on = July 10, 2007, 11:02 am
Press Release Author = Jimwatson
Industry = Real Estate
Press Release Summary = London is undoubtedly the commercial powerhouse of the UK - and indeed a big player on the world stage. As such, the prices and rents that commercial properties in the capital can command is sometimes staggering, especially to the newer investor or one a little further down the food chain.
Press Release Body = London is undoubtedly the commercial powerhouse of the UK - and indeed a big player on the world stage. As such, the prices and rents that commercial properties in the capital can command is sometimes staggering, especially to the newer investor or one a little further down the food chain.
That said, there are many who would advise investors to get into the commercial property sector whenever and at whatever price they can. Operating in the commercial rented property sector is viewed by many industry insiders as more expensive initially, but less of a headache in the long run.
James Cannon, head of property auctions at Savills, recently advised investors of the benefits of getting into the commercial sector. He pointed out that the landlord often does not have to be as hands on with the management and upkeep of the property, which is an important factor for some.
He acknowledged that it can be expensive to enter the commercial property world. However, at the same time he cited the fact that commercial property investors can often obtain a fixed-rate mortgage product from banks and building societies as a benefit and enabling factor. Residential mortgages are more subject to the vagaries of changing interest rates than commercial mortgages.
Despite the fact it is often possible to obtain a commercial mortgage at a decent rate, it may still be the case that the investor is unable or unwilling to pay London prices. This should not deter him or her, as there are many other areas where a good acquisition can be made and a healthy profit earned.
People may be tempted to look abroad, for instance. The Germany economy has been revitalised in the last two years, growing by 2.6 per cent in the past 12 months alone. One notable effect is that German companies are outsourcing less of their work to other EU companies and this has in turn led to an increased demand for office space in key German cities.
Closer to home, the industrial northern city of Sheffield has been highlighted as a potential commercial property investment hotspot by some analysts. According to Buy Association, developers \"have ambitious plans\" for the city and this is serving to stimulate the property market.
A spokesman said: \"Over the last five years, Sheffield has been fighting back against long-term deprivation and is undergoing regeneration. Major development projects are underway to improve the city centre and the majority of these units have been purchased off plan by investors.\"
There could be good commercial property opportunities in the city for the canny investor. Sheffield may present an interesting alternative to the massive expense of the capital, either as somewhere to gain experience of the commercial property market in a more entry-level situation, or as a gamble on buying cheap and profiting from any subsequent boom.
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