Is Commercial Property a safe haven for investors?

In times of turmoil politically and economically, does the appetite for property investment decline?

With Brexit, Covid, the cost of living crisis, the Ukraine war and now a change in Prime Minister, that might be the perception.

However, in fact we at Brown&Co are seeing the opposite.

Rather than a shrinkage, we are seeing a strong interest in Commercial investment instructions with buyers paying well over the asking price – often with cash too.

Why? I liken it to what we all want right now in times of uncertainty and rising inflation – financial security.

So, for an investor at high level, rather than gamble on the volatile stock market, putting money into real assets such as property and land in good locations let on long leases offers an assured income and long-term, a good return.

For example, we recently marketed for sale part of Norwich’s Sweetbriar Industrial Estate in Norwich – with 37 plots let on 125 year leases for a combined annual ground rental of £138,000.

This went on the market for £3.95million and it sold for more than £1.5m over this price. The level of interest was huge, with it going to best bids. It was interesting to note that all seven of the offers were above the asking price and all were cash buyers.

On a smaller scale, we also marketed for sale 343, Aylsham Road, Norwich, an investment property let to the Lloyds Bank, for offers in excess of £300,000.

We had 20 viewings on this with 12 bids received and it is now under offer, again for well above the asking price.

It’s not just in Norwich either; for example, a smaller retail unit in the centre of North Walsham, let to a local tenant, for sale for £135,000 has received offers above the asking price with some competitive bidding.

It seems at a time of volatility, investors still see the Commercial sector as a safe haven. 

Nick Dunn is Head of Commercial at Brown&Co in Norwich on 01603 629871.