Increased buoyancy in commercial property sales is being influenced by smaller developers and their experience in knowing how to make the highest return from their investments, according to one of our associates, Sam Spencer, who works at our Nottingham office.
Recent figures from HMRC shows UK commercial property sales have hit a nine-year high, with a six per cent rise in transactions during the past 12 months.
Sam believes this increase has been driven by small, private investors who are building their portfolios to provide long-term returns.
He said: “At first glance, one could assume the rise in commercial property sales is due to large corporations purchasing new assets. However, I believe it is due to small investors’ underlying confidence in the commercial property market, which has caused the shift in trend.
“They’re deciding to put their money into commercial property and reap a decent yield from rents, rather than banking their cash and not gaining much of a return due to low interest rates. Owning a handful of business premises offers a lucrative return if managed wisely, and it is this mindset that has encouraged developers to invest their capital in this way.
“Properties with the potential to make long-term improvements and increased return from small-scale investments are an attractive prospect, and it is the sale of these types of properties that have driven up national sales.
“It appears smaller-scale investors are confident enough in the market to take a measured risk by increasing and making the most of their property portfolios, which is reaping dividends for their own income and contributing to building the UK’s economy.”