Commercial property investors face changing market Two rising trends that affect property investors are people working from home who do not need office space and the shift to online shopping.
The Forbes Real Estate Council, a community of real estate investors, discussed ways in which investors can change if it is difficult to find tenants for their properties. Although addressed primarily to the US property market, their advice is equally relevant to the UK commercial property sector.
The council’s main advice is to be flexible and adaptable. Buildings can be repurposed. For example, office spaces could be converted to co-working spaces or for residential use.
Attention can be paid to the condition of the building. Refurbishing property can make it more attractive. Bridging loans are available to fund construction work.
Investors can diversify their property portfolio. For example, hotel accommodation, fitness gyms and properties in the health sector can provide could rental yields. Investors can benefit from the internet shopping by acquiring the warehouse properties that online retailers need.
Although many retail businesses are in decline, some shopping areas are being regenerated by adding community and leisure facilities to attract people to the location.
Not all businesses in shopping centres are affected by the rise of online retailers. Businesses like hair salons and restaurants do not compete with online retailers.
Commercial property investors need to change their business models in response to changing work patterns and retail habits. Commercial mortgages and bridging loans are available to finance a change of business direction.