Report a maintenance issue
Introduction
Investing in commercial property can be a lucrative way to generate substantial returns, whether through rental income or an increase in property value over time.
How lucrative depends on a number of factors, including the business sector, location and market conditions. In theory, landlords should be able to generate a higher yield from commercial property compared to residential property, with anything up to 10% yield per year.
If you’re looking for a commercial opportunity, Leicester is a great city to invest in, as both the fastest growing economy in the East Midlands, and having been ranked second only to London in a list of the best places to start a business. It’s an incredibly vibrant and entrepreneurial city with plenty to do for families.
The 2022 Good Growth for Cities Index ranked Leicester as the top City in the East Midlands and 14th out of 50 UK cities, using indicators such as well-being, work-life balance, environment, and crucially, economic growth.
If you’ve decided to invest in commercial property in Leicester, the next step is to find the right opportunity for you.
In this article, we, therefore, explore a variety of commercial property opportunities that can help you diversify your portfolio, generate rental income and build long-term wealth.
Office Space Investments in Leicester
Given the facts above, it’s hardly surprising that there’s high demand for office space in Leicester. The city is bursting with serviced office buildings and enterprise centres, particularly in high-growth areas in and around the city centre.
New houses, excellent transport links and travel routes, skilled people and various large-scale investment projects mean it continues to be a good time to invest in office space.
There has been significant take-up in the office sector in Leicester in recent times, supported by a rapidly growing young professional community of over 32,000 employees in the professional financial services sector alone.
Some of the factors to consider include the location, the lease terms you would offer and of course the economic outlook, particularly among the type of businesses which might be in the market for renting office space.
Retail Property Investments in Leicester
Investing in retail property in Leicester is continuing to provide landlords with a stable income stream from tenants on long-term leases.
From units in the city’s larger shopping centres to smaller community stores in local neighbourhood hubs, Leicester offers the full spectrum of commercial retail space.
There are pros and cons to each, so deciding which type of retail unit to invest in will depend on a lot of factors, including the local market and your situation. As experts in the local commercial market, this is something the Readings team can help you with as we have in-depth knowledge of all the major retail centres as well as smaller outlying stores across the county.
In positive signs for the city’s retail economy, Leicester’s Haymarket Shopping Centre reported £1 million in profit for 2022, after it was bought by Leicester City Council for almost £10 million in November 2021.
Occupancy levels were also up to 81 per cent at the centre – the city’s second biggest – with a footfall that had returned to pre-pandemic levels with 5.7 million visitors in 2022.
Fosse Park Shopping Centre was also extended to the tune of £168m, adding 140,000 sq ft of new retail and restaurant space and drawing big name retailers including Next, TK Maxx and H&M.
Industrial Property Investments in Leicester
Whether it’s manufacturing and engineering, and aerospace, creative and digital, or advanced logistics – the commercial property market is booming in Leicester, with investment of £629m in 2021. And it was industrial property that accounted for three quarters of that boom.
Being situated in the ‘golden triangle’ formed by the M1, M42 and M6 motorways, Leicester is a logistics hotspot, offering direct access to all major UK ports via road, rail and air (with East Midlands airport as the UK’s largest pure cargo airport).
The property boom was fuelled by a number of big warehouse deals, but Leicester also has plenty of manufacturing and engineering opportunities at MIRA technology park – Europe’s largest technology R&D cluster – as well as the National Centre for Combustion and Aerothermal Technology, Space Park Leicester and food manufacturers.
As home to one of the UK’s largest engineering universities, as well as a population of around 700,000 people, Leicestershire has no shortage of skilled workers either, which all make it a prime location for industrial property investments.
Hospitality Property Investments in Leicester
A few years ago, it was predicted that Leicester’s visitor economy will be bringing £2 billion into the area by 2025. The annual eight-figure visitor numbers, plus the busy city population, has resulted in an incredibly vibrant, diverse and cultural city with everything anyone could ever want from a city trip, from rich vibrant history to cutting edge of space technology.
It means opportunities for the hospitality sector are rife, with hotels, guest houses, B&Bs, bars, restaurants, cafes, tourist attractions, heritage sites, leisure centres, entertainment centres and more. From the bustling city itself to the various market towns and beautiful villages across the county which each have their own unique identity and offerings for tourists. These are underpinned by festivals, events, celebrations, sports and non-stop fun for the family.
How Readings can help with your commercial property questions
Commercial property investment can offer a wealth of opportunities to investors looking to diversify their portfolio and generate passive income.
By understanding the different types of commercial property and the factors to consider, investors can make informed decisions and build a profitable and sustainable real estate portfolio.
Of course, a commercial property investment is a big deal and not something you’ll want to take on lightly. As with all investments, it’s not free from risk, but there’s plenty you can do to mitigate that risk.
With the right investment and the right support, commercial property can still be a great way to generate a decent return. A good estate agent is vital to this process. As experts in this field, we can help you gain a deeper understanding of what you’ll be letting yourself in for and how to make sure your investment is a sound one. We can advise on the best locations and the types of businesses that do well there.
We can also help you on every step of your journey as a commercial property landlord to make the whole process as smooth as possible.
Interested? Check out our commercial properties currently for sale or give us a call today.
