Landlords are increasingly drawn to semi-commercial properties, according to Shawbrook. The bank has observed a significant surge in applications for such properties, with figures for 2024 almost doubling those recorded in 2023. This trend suggests a growing interest among landlords in diversifying their property portfolios.
In a revealing insight, Shawbrook disclosed that in the ongoing year, a remarkable 24% of semi-commercial property applications are for new purchases. This figure marks a substantial increase from the mere 13% reported in 2023. Such a shift indicates a pronounced inclination towards semi-commercial ventures among landlords, possibly driven by changing market dynamics and investment opportunities.
This rise in interest towards semi-commercial properties signifies a notable evolution in the investment landscape. With landlords increasingly exploring alternative avenues for maximizing returns, the surge in applications highlights a growing recognition of the potential benefits offered by semi-commercial ventures in the property market.
In recent months, the property market has experienced a notable reduction in volatility, prompting investors to explore avenues for expanding their portfolios with assets that promise higher returns. This shift in focus towards more stable investment options reflects a strategic response to market conditions, with investors seeking to capitalize on emerging opportunities. Against this backdrop, Shawbrook’s application data indicates a significant uptick in interest in semi-commercial properties, showcasing a growing appetite for diversified assets among landlords.
The South East region has emerged as a prime target for investors, with Shawbrook’s data revealing a substantial increase in inquiries compared to previous years. In 2024, 39% of investors have set their sights on the South East, marking a notable surge from the 27% recorded in 2023. This heightened interest underscores the region’s attractiveness as a lucrative investment destination, driven by factors such as economic growth, demographic trends, and infrastructure development.
Analyzing the types of properties garnering investor attention, Shawbrook’s data highlights a prevalent preference for mixed-use properties, particularly those combining retail spaces with residential units. Sixty percent of investors have expressed interest in such properties, indicating a strategic approach aimed at maximizing income potential while diversifying risk. The appeal of mixed-use assets lies in their ability to generate multiple revenue streams, offering landlords greater stability and resilience in an ever-evolving market landscape.
For small investors, the allure of semi-commercial properties extends beyond immediate returns, with many recognizing the value generation potential inherent in these assets. Leveraging permitted development rights to add residential units to existing retail spaces represents a strategic move to enhance the long-term viability of the investment. This approach not only capitalizes on evolving market dynamics but also positions investors to benefit from ongoing urbanization trends and changing consumer preferences.
Overall, the surge in interest in semi-commercial properties reflects a broader shift in investor sentiment towards diversified portfolios and income-generating assets. As landlords seek to navigate the complexities of the property market and capitalize on emerging opportunities, strategic investments in semi-commercial properties offer a pathway to sustainable growth and enhanced returns in the years to come.
Daryl Norkett, Director of Real Estate Proposition at Shawbrook, notes that property investors are adjusting to a climate of higher interest rates by expanding their investment horizons to include a broader spectrum of assets. Recent trends in application data reveal a growing interest among portfolio landlords in property types such as HMOs, social housing, and semi-commercial properties, which typically offer more attractive rental yields compared to traditional single lets.
According to Norkett, these investment opportunities vary depending on the specific property but hold significant appeal for investors seeking higher returns. Semi-commercial properties, in particular, present an enticing proposition due to their dual-use nature, combining both commercial and residential spaces. This unique feature allows landlords to benefit from diverse income streams, resulting in potentially higher yields.
With the potential benefits of semi-commercial properties in mind, Norkett emphasizes the importance of seeking professional advice to navigate this market effectively. Landlords interested in exploring the opportunities offered by the semi-commercial sector or diversifying their portfolios are encouraged to consult with a broker to gain a better understanding of their options and make informed investment decisions.
