The best commercial property investment advice is that given without talk of guarantees, because everyone knows there are no guarantees in investment. There are so many people today selling the secrets of commercial property investment to guarantee millions in profit, that one would expect there to be no secrets left, but that's true, because there never were any in the first place. Actually, investing in commercial property (not commercial property investment funds, actual properties) is, much like investing in residential property, like starting a business where tenants are the customers.
Business research and planning before taking the plunge is essential, also identifying your target market is one of the most important early decisions to be taken based on research and planning processes. Commercial property investment yields are determined by occupancy, and you can't predict occupancy without knowing your target market. Thank fully when it comes to buying commercial investment property the target markets are pretty easy to identify, but narrowing them down can be more difficult than in any other field -- though it is also quite good fun.
One unit that frequently comes up in commercial property investment UK is mall units. Let's say we have our eye on the leasehold of a typical unit in a busy mall in the centre of Manchester. As we know mall units are all pretty standard, with many of them being the same size. Now, obviously the target market for a mall unit is retail tenants, but what kind of retail tenants do you narrow down to, when practically any retail business would be happy to take residence in a busy mall.
Well, basically you put yourself in the shoes of potential tenants. If your unit is beside a double unit Specsavers, then you are pretty much ruling out small independent opticians as your potential tenants and probably large multinational opticians as well. But you also need to look at market saturation in the immediate vicinity of the mall, and check out when leases are set to expire, before asking the owners if they plan to renew.
By ruling out what kind of tenants won't want your unit then you can give yourself a set of potential tenants, your target market. You can then do comprehensive research on those industries and see how they are performing, if businesses in the field are growing and hiring then there will be strong demand for new units like your one. You can even go so far as to conduct surveys, or commission surveys to asses demand; asking businesses if they plan to take on new premises in the next 6 months, would they consider mall units etc.
*This page is provided for information purposes only and should not be construed as offering advice. IPIN is not licensed to give financial advice and all information provided by IPIN regarding real estate should never be treated as specific advice or regulations. This is standard practice with property investment companies as the purchase of property as an investment is not regulated by the UK or other Financial Services Authorities.