Commercial Break - Are commercial lettings worth another look?

Commercial Break - Are commercial lettings worth another look?
19th September 2006

All of a sudden, commercial lets are being talked about again. But what are the returns like and what's involved, writes David Lawrenson .

Let's take a look at what's involved, the kind of returns you can expect and how they compare to letting residential property.

Yields are still good on commercial

Average buy to let yields in the UK are down around the 4% mark and for many investors new to the market that means they are going to have to sit tight and hope for capital growth to make it worthwhile in the long run.

On commercial lets retail yields vary from 4 to 6% for a good prime or a reasonable secondary pitch. And if there was a flat above the shop providing an additional income the yield could be slightly higher at about 6 to 6.5%.

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