Colchester - a great place to buy commercial property

Colchester industrial property is proving a great long-term investment without the risk of the boom and bust of the residential property market, says a legal expert in the town.

Melanie Bache is head of commercial real estate at law firm Birkett Long, and says her industrial-estate owning clients in the county have seen ground rents increase by 12 per cent over the past five years.

“While this is nothing like the growth the residential property market sees, this is really good news for commercial landlords,” she said.

“Owning industrial commercial property tends to be a much safer bet than a residential investment, which is why you often see trusts making this type of investment. Colchester has a good future in this respect.”

She said landlords of industrial properties are typically trusts or other organisations that have larger funds they want to invest for the long term.

When the financial crisis hit in 2008, the residential market crashed a lot quicker than the commercial one and she says it is the same with the rise up.

From 2008 until now Melanie said landlords had to be more lenient on their requirements of commercial tenants, which meant exposing themselves to more risk.

“Their view has been it was better to have a tenant in place rather than experience a void period. Now that has changed and rents are slowly increasing,” she said.

With the recovering economy, it means tenants will not have as much bargaining power in agreeing ‘heads of terms’ when they negotiate their leases.

Richard Swan, commercial agency surveyor with Whybrow, chartered surveyors and property consultants, said: “Colchester industrial estates tend to benefit from good road infrastructure and their proximity to London. Clients see the county as an ideal place to invest.

“They tend to attract a 10 per cent yield year on year, compared to 6-8 per cent for retail properties and just 4-6 per cent for residential.

“If you are going to invest in commercial industrial estate property be diligent, make sure you know what is going on in the area now and in the future that might affect your investment.”

Mel Bache
​​01206 217332
​[email protected]