An Absolute Beginner’s Guide to Investing in Commercial Property in West Sussex
Investing in the real estate sector in the UK is primarily focussed on two key business sectors, namely, residential (homes, serviced flats, and apartments) and commercial (retail, offices, leisure properties like hotels and co-working).
Investment may also include lands or existing properties for future development. Furthermore, there are additional opportunities to invest in niche commercial property in West Sussex, such as logistics facilities, warehouse, and the industrial sector. However, they are more likely to attract a more selected group of investors.
INVESTING IN COMMERCIAL PROPERTY IN WEST SUSSEX
The commercial property market in the UK is remarkably different from the residential real estate sector in terms of both occupancy mode and the property characteristics, such as layouts, dimensions, location, building systems, to name a few.
Occupants of commercial fixed assets like grade-A offices in West Sussex would usually secure extended leases as they are more likely to continue utilising their properties for five, ten, fifteen or even twenty years.
Such leases are governed by the terms and conditions of full repair insuring, or FRI, in short. In other words, the lessees or tenants would be accountable for all the repairs, insurance, and maintenance works of those leased properties. It effectively means that the rent receivables are already net of operating and maintenance costs.
Returns or yields from commercial properties like major retail space or grade A offices are generally regarded as more secure and considerably higher when compared to those of most of the residential fixed assets.
This is due to the reason that income security is guaranteed if your lessee happens to be a blue-chip or high-net-worth occupier with a sound covenant. If you are looking to lease out your existing property or looking for one that is available on rent, you may choose to get in touch with any of the most acclaimed, commercial property consultants in West Sussex, such as the KBA West Sussex.
Commercial tenants in the need of large spatial areas would seldom relocate, but you cannot expect the same from residential occupiers, who might consider moving in just a couple of years, vacating your property much earlier than you could have probably anticipated, and creating the need to arrange for a new party.
HIRE ANY OF THE COMMERCIAL PROPERTY CONSULTANTS IN WEST SUSSEX FOR DIRECT INVESTMENTS
For any individual desirous of investing in the commercial offices in West Sussex, there are two major alternatives, namely direct investments and indirect investments. However, the scope of the present discussion is limited to the former one.
To make direct investments in the real estate industry, you are required to finalise an appropriate niche in the commercial property market in the first place, such as retail units, offices, shopping malls, coworking spaces, etc.
Properly do your research on the chosen market segment along with preparing a business strategy and a feasibility study.
It is highly recommended to engage any of the most frequently referred, commercial property finders in West Sussex for these aforementioned jobs and once you are done with selecting the niche that you intend to invest in, you are expected to start looking at the following matters of interest in more detail.
⚫ Net yields
⚫ Return on equity
⚫ Return on project
⚫ Internal rate of return
⚫ How easy it is to gain entry into the selected business sector
⚫ Problems concerning planning and development
⚫ Asset management
THE BOTTOM LINE
The next logical step would be to secure funding for the planned development of the commercial real estate.
You would probably require to show enough deposit, either obtained by pooling the capital amongst the business partners or friends or own investment, for convincing the key financial lender and being considered eligible to borrow money.
Furthermore, you would also need to demonstrate evidence of impeccable track record that proves you are capable of investing in the local property market.
While this might appear incredibly complicated to the first-time investors and those with little experience, teaming up with a veteran property consultancy, such as the KBA West Sussex, could immensely benefit you in expanding your existing portfolio in commercial property in West Sussex or building one from scratch.