Growing trend of landlords investing in semi-commercial property

Growing trend of landlords investing in semi-commercial property

0:02 AM, 4th June 2024, About 4 weeks ago

Text Size

Landlords wanting higher yields are increasingly looking towards semi-commercial properties for investment, research reveals.

Shawbrook Bank says that applications for new purchases are nearly double this year compared with 2023.

Using its internal data, applications for semi-commercial properties reached 24% in the first half of 2024, up from just 13% in all of 2023.

Shawbrook says the trend is down to a more stable market, allowing investors to diversify their portfolios with assets that offer higher rental yields.

Investors are adapting to a higher interest rate environment

The bank’s director of real estate proposition, Daryl Norkett, said: “Property investors are adapting to a higher interest rate environment with portfolio landlords taking the opportunity to grow their businesses with a wider range of assets.

“We’re already seeing this in the applications we’ve been receiving recently, with investors looking towards property types like HMOs, social housing and semi-commercial properties that tend to offer higher rental yields than traditional single lets.”

He added: “These opportunities are property specific but can be very attractive to investors.

“Semi-commercial properties in particular have the added benefit of having both commercial and residential space, meaning that landlords can enjoy higher yields with a mix of income streams.”

South East sees most interest

The South East of England has seen a particularly strong surge in interest, with nearly two-fifths (39%) of applications this year targeting the region compared to a quarter (27%) in 2023.

Data also reveals that retail spaces with flats above are the most popular type of semi-commercial property, attracting 60% of investor interest.

These properties often hold additional value generation potential through permitted development rights for adding further residential units.


Share This Article


Leave Comments

In order to post comments you will need to Sign In or Sign Up for a FREE Membership

or

Don't have an account? Sign Up

Landlord Tax Planning Book Now