There can still be potential profits in investing in commercial property, but the type of property you choose may be more important than ever. Recent figures show that supermarkets and warehouses may be a good bet, while high street premises and offices may be riskier. The question is, will the situation continue and what could the answer mean for your property investment plans?.
In recent years, some types of commercial property have struggled in Britain. These issues have been further magnified by the global pandemic which resulted in shops being closed and offices not being used. Having said this, trusts with warehouse and supermarket mandates continued to prove popular.
In the current climate, there are three of the known open-ended funds for property that are still suspended as a result of Covid, and there is continued debate about whether closed-ended funds may be a better choice when it comes to illiquid assets like buildings, which may be difficult to sell.
Tough times for commercial property
In 2020, commercial property was ranked as the worst-performing open-ended asset in terms of sales and the Future Strategy Club, a consultancy business, claims that around 25 per cent of all office workers in London have not been in their traditional working environment since March 2020. To add to the problems for commercial property investors, many businesses have been unwilling or unable to meet rent payments.
Not all bad news
There is no doubt that there have been many issues in the sector caused by Covid but this does not mean that there are no opportunities. Sourcing conveyancing quotes can still be on the horizon if you make the right choices.
Investment trusts offer investors opportunities with a variety of property types, including those that have thrived even during the pandemic. This includes supermarkets and warehouses that are used to fulfil the demand for online shopping.
The Office for National Statistics reported that online shopping sales went up by 50.4 per cent between February and July of 2020, indicating the way an already-growing field has seen its success escalated at an even faster rate than expected due to the Coronavirus pandemic. Read more about the upward trend for online sales on the Office for National Statistics website at https://www.ons.gov.uk/businessindustryandtrade/retailindustry/bulletins/retailsales/july2020.
The new breed of trusts target particular areas of current interest and growth markets, such as online delivery logistics. Many of these growth markets have been emerging over recent years but their popularity has accelerated due to Covid.
Investing in beds
Another area that is growing and may see increasing demand for conveyancing quotes in the near future is beds. This includes everything from student accommodation and rental properties to facilities for older people. This is due to a growing demand for quality accommodation for people of all ages and a recognition of the profit potential that this can offer.
Brexit is also likely to continue to highlight the need for effective supply chain management which may, in turn, prompt increased demand for logistics and industrial space.