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Smart Local Investors Turning to Commercial Property- 29/03/2011
Canny Shropshire investors are moving back into commercial property to take advantage of lower prices and higher yields, according to a leading Shrewsbury commercial property lawyer.
David Raymont, an associate in the Commercial Property Department at Shropshire law firm FBC Manby Bowdler LLP, says that an increasing number of private individuals are realising that the local commercial property market has bottomed out and are taking advantage of good prices on offer.
“We are presently advising a number of investors on purchases of commercial property in and around Shrewsbury and Shropshire, which will provide a yield well in excess of 7%. In many cases they are also achieving strong covenants with leases in excess of 10 years on the investments they are acquiring,” says Mr Raymont, who is based in FBC Manby Bowdler’s Shrewsbury office.
“The deals include the purchase of a town centre office block, a mixed use investment and a number of retail units, all with a purchase price of less than £1 million.
“This is very much in line with the latest figures from the IPD (Investment Property Databank) which showed a total return (rent plus capital growth) of 15.1% for UK commercial property in 2010.
According to Mr Raymont, few of the acquisitions rely on third party finance. He says: “The people we are advising do not require bank finance, but are making their money work hard for them, by recognising the long term opportunities in commercial property. They are being selective and astute in acquiring the best freeholds which the banks and cash strapped owners want to let go of.
“Such opportunities across the office, retail and industrial sectors may continue to be available in the next few months as more property comes to the market, but will not continue much beyond that,” concludes Mr Raymont.
With offices in Shrewsbury, Telford, Bridgnorth, FBC Manby Bowdler is one of the largest law firms in Shropshire and the West Midlands.