David Sullivan, Managing Partner
As with the residential property market, London has always been the king of yields in the commercial property market. This has been particularly true since the economic recovery, with a really strong commercial property market in London over the last two years.
However, with yields being squeezed and the market getting tougher and more expensive in London, should you consider an investment elsewhere in the UK?
Eyes are shifting northwards to the new “Northern Powerhouse” that is Leeds and Manchester and additionally along major routes such as the M40 to Birmingham and the M4 westwards to Bristol.
Commentators on the commercial property market suggest that the echoes of the recovery in the London market two years ago are now filtering out to the regions across the UK and bringing yields of up to 7.5 per cent.
A lack of new builds regionally in the last few years and the improvement in the economy is driving a new demand for commercial property that could see a rise in rent by around 22 per cent, which demonstrates the real potential of regional commercial property.
Closer to home, the Belfast market offers yields of over 10 per cent, an increase of 7 per cent this year and a huge surge from very real issues faced by investors in 2012 with a negative return.
These are figures that the rest of the UK would be proud of and returns are beating the European stars such as Stockholm and Copenhagen on both retail and office sectors. Belfast city centre has seen a number of retailers buying up commercial retail space recently and this has resulted in improving retail transactions. Stormont’s rethink on business rates can only help to encourage businesses into Belfast any beyond.
Commercial property is looking more and more like a sound investment, but ensure that you research the market and the property and get advice from a specialist commercial property lawyer before committing.
For more information about this article or any aspect of our commercial property solutions, please call David Sullivan on 028 9077 4500
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