Commercial Property Investment - Is It Time to Take Your Profits?
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Find out what's really going on in the Commercial Property Space with Jason Werth, our MD and Commercial Property expert.
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- The current Commercial Property market
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- Sector & Geographical analysis
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Commercial property investment has become an attractive investment opportunity for private and institutional investors alike over the last decade. This has reflected the relative volatility of holding investments in equities, and the potential for strong ongoing cash flows from rental incomes. Commercial property investment offers a predictable yield that can be attractive at times of low inflation, and also offer the potential for capital appreciation during periods of strong economic growth.
But the turbulence of the financial markets over the last few years, has affected many areas of investment. So how has commercial property investment performed over the recent turmoil - and is there an indication as to where the commercial property investor should be moving now?
Prior to 2007 commercial property undoubtedly went through a speculative bubble, stimulated in part by cheap and available credit - the next two years saw a massive correction, as credit all but dried up, and over wrought commercial prices were bought back to earth with a bump. A typical commercial property investment would have seen a loss of 40% in capital value terms by mid 2009. More recently the market has seen a slight recovery, with a 15% capital value rebound over the last 11 months (according to the IPD UK Monthly statement for July 2010).
However, this recovery is already showing signs of petering out, with the IPF Consensus Forecast Survey predicting a fall in commercial property investment yields:
"The dip in capital values next year is now predicted to be worse than previously expected. The quarterly survey shows that all sectors, except West End offices, have seen downward revisions to capital value growth forecasts. Standard shops are expected to perform the worst, with forecast capital value falls of 2.4%"
This may prompt many commercial property owners to consider whether their investment cash is better employed in other assets. If the values for commercial property investments have indeed peaked, then now would be the best time to sell your commercial property investment. The prospect of moving out of the commercial property market may be made more attractive, for many owners, by being able to close out their commercial loans.
Banks have become increasingly harsh in their interpretations of loan covenants, with many insisting on full loan repayment, whenever the ability of the borrower to repay the loan looks even slightly in doubt. Couple that to the high costs of servicing debt, since the credit crunch pushed the interest charges on loans even higher, and the attractions of becoming debt free are very apparent.
So if you are ready to cash in your commercial property investment, and move your surplus cash into more attractive investments, who do you turn to for a quick, convenient and fair sale of your commercial property?
SellMyCommercialProperty could well be the perfect partner for you in this situation - we have access to considerable lines of finance, and are looking to place those funds in the commercial property sector. This means we can give you the equity from your premises fast, and at a fair market price. Our experienced professionals operate country wide, and can make an initial assessment and valuation within 48 hours. Give us a call today, and let us explain how SellMyCommercialProperty can allow you to realise you commercial property investment and move on to your next opportunity.
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