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Investors go commercial

The findings show 71% of buy-to-let investors already have an element of commercial property in their portfolios and 89% of those who do not currently invest in commercial property have plans to widen their portfolio.

The survey also shows that commercial investors favour small offices and office developments and light industrial units. Only 13% of investors choose shops and retail units.

However, for those who do not invest in commercial property currently, shops and small offices emerge as the preferred investment.

David Whittaker, managing director at Mortgages for Business, says: “The residential buy-to-let market has seen a tightening in yields over the past 12-18 months with investors increasingly taking a long-term view of capital appreciation.

“It is not surprising that serious investors are looking toward the next investment hotspot. What is surprising is the number of investors that already have some commercial property in their portfolios.”

The survey reveals that 55% of commercial property investors expect to increase their portfolios by between three and five properties over the next 12 months. Investors who currently include commercial property in their portfolios expect to see an average total property return of approximately 13%.

Many investors, 41%, see their buy-to-let as being a long-term proposition over 20-plus years.

Investors choose commercial property primarily on its rental income prospects, location and long-term growth prospects.

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