Investing In Multi Let Industrial
Posted on 5th March 2019 at 10:13
Demand for industrial has been increasing rapidly over the past few years, and we are advising our investors to expand their portfolios by entering into this market.
We have a proven model of sourcing and managing these sites and there are significant benefits of investing (wisely) in multi let industrial.
1. Online Presence vs High Street Retail
The industrial market has significantly grown in the UK largely due to the increase of online businesses. The days of shop fronts and high street stores are rapidly dwindling, and the benefit of being able to order (almost) anything from the comfort of your home has significantly affected the retail/industrial market.
Industrial uptake has grown in the UK and the North West has been no different.
The increased demand has increased rents and in terms provided industrial owners with improved capital growth on their premises.
2. Contributions to Operating Costs
For those less familiar with the commercial property market, the terms FRI, IRI and IR leases may mean absolutely nothing to you. This blog is not the forum for all the technicalities of each lease, but briefly, they refer to “Full Repairing and Insuring”, “Internal Repairing and Insuring” and “Internal Repairing”.
In short, commercial tenants are required to pay towards operating costs, repairs and insurance (and very often management fees if the lease is worded correctly!) This means that the gross yield expected on the property is equal to the NET yield without unexpected costs along the way.
3. Flexibility of Occupiers
The advantage of buying a multi let site over a single tenant site, is the variety of uses the property could be used for. Operating costs can be recovered by way of a service charge, but the assortment of tenants spreads the risk over multiple different sectors.
Units can be used for storage and distribution, manufacturing, leisure (e.g. gyms) or car repairs (to be bought with caution!) along with others. By spreading the risk amongst multiple trades it is possible to take advantage of market volatility, capturing market upside, while cushioning capital during a market downturn.
Over the past few years we have successfully purchased and retained several multi let industrial estates over the North West of England on behalf of clients. Managing these estates requires an in depth level of knowledge and experience which Amco Commercial have. The experience we have has enabled us to transform these estates on behalf of the proprietor.
If you are looking to invest in multi let industrial register your requirements today.
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