Monday, February 26, 2024

Why investing in UK commercial property is a good idea 

Thinking about becoming a commercial landlord? The UK commercial property market is growing and projected to reach a value of $4.01 trillion in 2023, so you will be investing in a thriving sector. Commercial property investments can provide investors with a reliable secure cash flow that stays strong even during economic downturns and recessions.

Let’s delve a bit more into some of the reasons that explain why in the UK commercial property market is a smart idea. 

A long-term stable source of income 

Commercial property investments in the United Kingdom can provide you with a robust source of long-term income. New industries, advances in technology and evolving consumer habits (such as the rise of e-commerce) have led to new demands for the usage of commercial spaces. This means you can expect high rental yields and becoming a commercial property landlord is a wise durable investment move. 

Owning a commercial property could provide you with a comfortable nest egg for your retirement years. Therefore, you must do all you can to protect your commercial property investment. Taking out comprehensive commercial landlord insurance is a vital way to protect your commercial property investment. 

Increases in demand in certain locations

Commercial property is particularly sought after in certain locations, e.g. London and the South East, the North West region in and around Liverpool and Manchester. Owning a commercial property in high demand locations can easily lead to you having business tenants prepared to pay high rents to benefit from the privilege of having a commercial space in prestigious sought after locations in the UK.

Appreciation of the property’s value 

A simple rule of investing is that it’s always best to sell an asset for more than you bought it for (and above inflation during the time period). Another reason why investing in UK commercial property is a good idea is that, provided you play your cards right, your property could greatly increase in value when you decide to sell up in the future. 

Tax benefits for commercial property landlords 

There are tax perks that come with owning a commercial property in the UK, and these include

  • Being eligible for Business Asset Disposal Relief tax that enables you to pay a lower Capital Gains Tax of just 10% after you have owned your commercial property for at least 2 years
  • Claiming capital allowance expenses 
  • Accessing VAT refunds by recovering expenses such as decorating and office renovation fees
  • Stamp Duty is lower for commercial property compared to residential property, and if the property is worth less than £150,000 

Diversifying your investment portfolio 

Is your investment portfolio starting to look a little stale and in need of an injection of new life? Investing in commercial property is a top solution for diversifying your investment portfolio. Remember, there are many different types of commercial property you can invest in to diversify your portfolio, including 

  • Office
  • Industrial/Manufacturing
  • Retail
  • Leisure 
  • Healthcare

There are no limits to the amount of money that can be made by taking shrewd informed commercial property investment decisions. 

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