Financial advisors tend to counsel against commercial property investments as part of a pension fund on the grounds that they are illiquid, can be subject to void periods with no rental income (and related costs) and that values can go down as well as up.
However, there are very good reasons why overseas investors have bought over £100 billion pounds worth of UK property in the past 6 years. These include net returns of over 5% and sometimes as high as 10% and exponential capital growth resulting in net yields of over 20% on historic cost.
At Underwoods, we regularly undertake valuations of commercial properties held within Pension Schemes in accordance with mandatory professional requirements but adopting a cost effective and pragmatic approach. Our general experience is that well-bought property investments perform very well in pension funds, in the long term specifically, producing net yields in excess of 7.5% along with inflation beating capital growth.
Underwoods also undertake a full property management service for properties held in pension schemes to ensure that all property management issues are taken care of.
Individuals who are considering property acquisitions for inclusion in their SIPP’s or SAPP’s can club together with other investors buying a one half or perhaps one third share interest in a property thus enabling them to buy a much higher value and better performing property than perhaps would otherwise be the case. It is of course of crucial importance that the right property is purchased in terms of location, structure/fabric, use and tenant covenant and at Underwoods we are able to advise on all aspects of such propositions. Further information and advice can be obtained from Stephen Battersby (01604 404060, firstname.lastname@example.org), Charles Church (01604 404060 email@example.com) and Robert Keeves (01604 404060 firstname.lastname@example.org).
Financial advisors tend to counsel against commercial property investments as part of a pension fund on the grounds that they are illiquid, can be subject to void periods with no rental income (and related costs) and that values can go down as well as up. However, there are very good reasons why overseas investors […]