WHILE the retail market does seem to suffer from changing consumer habits, the opportunity and demand from hot-food takeaway restaurants offers landlords and owners of second-hand A1 and A2 property an excellent investment. Berrys have recently acted for a landlord of a former bank premises where the property was purchased to convert the upper floors for residential use.
WHILE the retail market does seem to suffer from changing consumer habits, the opportunity and demand from hot-food takeaway restaurants offers landlords and owners of second-hand A1 and A2 property an excellent investment. Berrys have recently acted for a landlord of a former bank premises where the property was purchased to convert the upper floors for residential use. Through our commercial expertise and knowledge of the occupiers and market, we entered into discussions with an A5 operator for the conversion of the ground floor. The property was a former bank premises located in a prominent position of the high street and situated in a market town. The opportunity to convert this property and provide a mixture of asset management and strong covenant offers a landlord a highly attractive investment that could either be sold or held. The opportunity for the various operators in this sector is also apparent by the demise of the high street and alternative tenant demand that we see in our local market towns. The continuing demand from charities for retail opportunities and their position in terms of business rates, ensures that many towns and cities are well provided for in this sector. While local objection to A5 use is evidenced by the planning system, the operators within this sector are more sophisticated and conscious of their impact in town centres. Landlords who are well advised can ensure that the development and conversion of second-hand property actually provides a high-quality asset that is a benefit to the town, attracting more variation of pedestrian footfall and, therefore, investment. With the limited investment opportunities available to the market and investor activity in the commercial sector is strongly focused towards the industrial/warehouse properties, a strategic purchase of second-hand retail and professional premises can offer an alternative to these more traditional investor markets. Unlike most tenants that seek to enter into new leases within second-hand retail property, the A5 operators assess the location as a longer-term investment. They also have fairly considerable fit-out costs that the operator needs to amortise over reasonable lease periods. Therefore, 10-year leases are common and this coupled with a good covenant, will ensure that your property will show a good return on capital and growth in the future. The market is specific towards these properties that offer the right opportunity, however, Berrys are well placed to assist landlords and owners alike. Whether it be the assessment of the building works required to ensure a property is fit to offer or indeed the opportunity that properties offer towards A5 use. If you are an owner of commercial property and would like to discuss these opportunities or any other, then contact Simon Parsons BSc (Hons) MRICS or Duncan Batty BSc (Hons) MRICS on 01536 517777 or 01327 356140.