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Insight & Opinion

Investors turn to commercial investment properties to diversify their portfolio

Author: Gemma





Since the introduction of higher Stamp Duty taxes on residential buy-to-lets, investors have been looking for a way to reduce their initial outgoings on their property purchases.

A non-residential Stamp Duty tax is paid on commercial investment properties which is at a much lower rate than buy-to-let taxes.

Commercial propertyResidential buy-to-let property
£0 to £150,000 is charged at 0%£0 to £125,000 is charged at 3%
£150,001 and £250 000 is charged at 2%£125,001 to £250,000 is charged at 5%
Over £250,000 is charged at 5%£250,001 to £925,0000 is charged at 8%
 £925,001 to £1.5m is charged at 13%
 Over £1.5m is charged at 15%

Commercial property and Brexit

Despite a dip in interest post-Brexit, new interest from British businesses and overseas investors has improved the outlook for commercial investment properties.

Before the vote, Property Industry Alliance (PIA) reported that, in 2015, the value of the UK’s commercial real estate stock peaked at £871bn, up 11% when compared to the previous year.

With the UK’s economy remaining stable despite the dip in the value of sterling and the on-going uncertainty surrounding Brexit talks, the commercial sector may offer investors better returns than they think.


Diversifying your property portfolio

Investing in commercial property represents a unique opportunity for investors to expand their property portfolio.

Investors who diversify their portfolio generally have greater success as they can capitalise on the positive elements across a selection of asset classes.

Commercial real estate investing is usually cheaper than residential buy-to-let opportunities and, in some cases, produces a higher rental return.

This tactic allows investors to benefit from the highs of the property market and protect themselves against the lows.

Investing in commercial property

Experience Invest’s latest opportunity, Hub2 is a new, fully managed commercial office investment in Liverpool which will provide investors with 10% NET per annum, assured for 3 years.

Located in the city centre’s creative hub, the individual suites within Hub2 will appeal to start-ups and those who wish to expand their business in a bustling and professional working environment.

With office suites within the development available from £69,950, investors will pay a zero rate of Stamp Duty tax on their investment.

“As this is our highest yielding and our lowest entry level opportunity, we have already sold 40% of the commercial office suites in this development. Many investors have been interested in the time frame of the build as the completion date is set for Q2 2017,” Dale Anderson, Project Manager explains.

Are you considering buying commercial investment properties? Contact Experience Invest today to find out more about how you can generate a passive income from this sector.

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