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Give a job a home

5th May 2005 | back to article listings BACK    print this article PRINT

While most property concerns are usually limited to paying off the mortgage or making progress on the property ladder, a thought should be spared for the commercial property market, which tends to see far less activity by way of investment, the emphasis residing more on letting.

The UK currently has somewhere in the region of four million small and medium-sized businesses, collectively contributing billions to the economy each year. Many of these smaller firms do not currently own the premises from which they operate, a trend which, it is being warned, business owners should be looking to reverse if they want to ensure future prosperity. New research from HSBC has found that though commercial property activity in the south-west increased by 58 per cent to sit at £1.3 billion overall, 39 per cent of businesses in the region do not own their premises.

And this isn't simply due to unwillingness. 70 per cent of business owners surveyed by HSBC agreed that owning their premises would help their business to grow, the result of diminished renting costs and the addition of a property as a tangible asset. It is thought that a business should be on its way to buying commercial property by the time it reaches its fifth birthday.

"We estimate that 76,530 UK businesses will celebrate their fifth birthday in 2005 and while some owners are nervous about investing in commercial property, for a young business it can provide additional flexibility and lay the foundations for expansion," comments Richard Cottell, Exeter area commercial manager. "Businesses which are five years old are likely to have come through some hard times. Typically, they have a hard-won understanding of their market, a degree of trading security and robust and experienced management - they are ready to think about the next stage in their evolution and buying property can help.

"Owning commercial property could give owners greater control over their destiny," he adds.

A UK-wide study has found that newer and more established firms alike are somewhat uncertain over the prospect of buying their premises outright. The Royal Institute of Chartered Surveyors (RICS) this week revealed that the commercial property market is looking fairly strong, with positive growth across sectors and continued rises in occupier demand. A lack of investment in commercial property has been partly attributed to the reintroduction of stamp duty land tax in disadvantaged areas, a factor that could become less significant as economic trends stabilise.

This is a press release by Assetz also available at http://press.assetz.co.uk/articles/1863.html. Alternatively, please see our full press release archive.

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