When people are looking into property investment most people consider the buy to let market as residential property. There is a thriving commercial property investment market, many investors as much as 37% believe that commercial property will continue to rise in value over 2008. Commercial property is looked upon as a long term investment and is bought not only in the UK but also abroad.
Commercial property rises
Commercial property gains over the last year are estimated to be on average around 20%. There are a number of ways that you could get involved with commercial property investment. One method is fund investment; it is wise when looking at property funds to choose wisely, many funds will buy shares in property companies rather than actually buy property. Property share funds are a larger risk, as we are all aware shares can go down as well as up. If you buy into funds that invest directly in property then you are likely to be receiving much more of a long term solid investment as the property prices are continuing to rise. Over the longer term you will also be looking at rent increases coupled along with the property price increases.
As mentioned previously the UK market is not the only place where investment in commercial property can be made. The European markets along with Asia are considered commercial property hot spots and make good investment funds. The risk associated with buying property abroad is higher but the returns on the investment can be greater. Many funds will mix in both home and abroad property to offset some of the risk involved.
Commercial property sectors
The commercial property sector can be broken into different types, industrial, retail and office. If you are looking into the safest form of investment then the industrial property offer the best bet. Industrial property will return a lower yield but is more likely to command a longer term tenancy. Retail and office property have external forces that can drive down the investment value and are open to cyclical factors. Stability of tenancy and turnover is greater in office and retail property but their return on investment is higher when under occupancy. Commercial property investment and residential property investment vary considerably and it is not often that both will be found in the same fund. Commercial property is largely bought to make profit on the yield or the amount of rent that can be taken compared to the cost of the property. However in the residential markets this is often the reverse, where the capital growth is the main factor.
If you are interested in commercial property development and looking to buy into investment funds then take some time to search through the internet. There are many companies that offer the ability to buy into external funds, look around for investment guides, information and advice on how to get started in commercial property development. Remember commercial property investment is different from residential investment and you should fully understand the market and any external factors before considering investing.