Commercial property income generation is a very hot topic
In the last couple of days there’s been much talk on social media and in the press about the London commercial property market.
Even though we are almost two months down the line since the EU referendum vote it’s obvious nothing is particularly settled. There is a slight easing of fear in general. But the commercial property market is less than stable. We need commercial property income generation rather than capital growth perhaps.
Is this a liquidity pinch ?
Will Fulton, the Chief Exec from UKCPT – The UK Commercial Property Trust has been quoted as suggesting there is a form of liquidity pinch. This has been caused by investors doing their best in these turbulent times to reassess their real estate asset values. Wouldn’t any sane businessperson step back and re-evaluate what they are doing? Isn;t it good sense to plan what future strategy might look like? It’s not a cause for undue concern, just sensible housekeeping wouldn’t you say?
Speculation is not helpful to the commercial property market
We aren’t sure whether reporters searching for stories are helpful at this juncture. When something as significant as the ‘EU out vote’ happens only time will tell how everything will shake down. Speculation is never good. Negative press can affect the markets. Even temporary losses can spark panic. So it does pay to keep one’s powder dry wherever possible.
We need to dig deeper than the headlines
However, we have to note that UK commercial property owners FTSE 250 has seen a drop in its value assets albeit of just 0.2pc . In fact its asset per share was 86.5 on the 18th August. This is lower than the 86.5p in the previous half year. But it always pays to dig deeper than the headlines. In fact this wasn’t even a headline as the company had made the decision to borrow at higher than current interest levels. So where’s the news in this?
However, it does feel like the market has seen a period of instability in the last two months. Yet there is still demand for commercial property. Foreign buyers have been quick to see the potential after sterling performed in their favour. But should commercial property income generation be a first priortity in these less than certain times.
If we look at UKCPTs order book we can see that only 2 out of 16 leasing transactions failed to continue post referendum. Enquiries are also continuing as usual. August is after all a traditionally slow month with many people taking annual leave.
But it seems the watchword may well be income rather than capital growth
Bearing that in mind it might be worth considering whether a commercial property within your portfolio might be best rented out to a church. The growth in new churches has been astonishing and we have over 200 clients on our books looking for the right commercial property to lease in London alone. Never has there been a more fertile time to make your commercial property income stream a reality and offset other losses.
Why not come into the office and have a chat about what kind of income we can generate for you. In this instance, post referendum, you have absolutely nothing to lose and you may well gain a lucrative deal. Start your brand new commercial property income stream by contacting us today.