Investing for Dummies, 4th UK Edition

Part IV

Property and Alternatives

What’s good about commercial property?

Commercial property, such as offices, factories, warehouses and retail premises, is a lower-risk investment with a good return if the price is right and it’s the right property in the right place.

Commercial-property ownership is generally structured so that you need a minimum £50 million to £100 million to be considered a player – and even more to get a really diversified portfolio. However, some commercial-property investment opportunities exist for those whose fortunes lack most of those zeroes, usually via a specialist collective vehicle.

In a nutshell, here are the long-term benefits of commercial property:

• Rental yields are up with higher-risk corporate bonds but with less likelihood of financial problems.
• Rents tend to increase; some properties have automatic increases every five years.
• Demand for top-class property remains high. Property buyers like the term ‘primary’, which can be used for a location or the quality of the building, although the two often go together because you tend to put up the best buildings on the most attractive sites.
• Overseas investors like the solidity of UK property.
• Property values tend to at least keep up with inflation.

Find out more about Investing at www.dummies.com/extras/investinguk.

In this part …

• Discover how to turn property into a paying proposition.
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