Properties in the UK have appeared to be one of the most attractive propositions, especially for overseas investors. The demand for commercial property in UK can be attributed to a number of factors. These include:
  • The declining value of properties in UK (when it comes to the domestic market), especially the price of commercial properties have come down considerably.
  • The value of sterling is comparatively less in comparison to various other currencies.
  • The other sectors of investments have continued to remain volatile in nature.


A report published in 2009 by the Royal Institute of Chartered Surveyors Global Commercial Property Survey, however, indicated that the overall picture in UK was better than that of the other markets around the globe. There had been a steep increase in the number of investment bidders for each property in the region.

Though the general trend is likely to continue despite the fall in value, the market is expected to gain momentum as far as pricing is concerned. Some sections have been identified as the principal sectors of commercial investment including:
  • Offices: Business hubs and standard offices
  • Leisure: Restaurants, leisure parks, hotels and pubs
  • Retail: Departmental stores, shopping centres, standard shops, supermarkets and retail warehouses.
  • Health: Health care properties
  • Industrial: Distribution warehousing and industrial estates.


There are several factors that investors take into consideration while assessing a potential location for investment, chief among them being the risks involved and the overall costs.

Talking about the potential risks, these are largely
dependent on the individual circumstances and the nature of the asset that is to be acquired by the investor. It is assumed that investing in a particular building increases the risk considerably, much more than if you plan to acquire a portfolio of properties. By distributing the investments in different sectors over a large number of properties belonging to diverse sectors and spread at different locations, investors can choose to alleviate excessive exposure at a specific location.

Next in line comes the issue of costs or the expenses involved. A typical acquisition case is likely to incur the following expenses:
  • The legal cost along with an additional tax such as VAT
  • The registration fee required for Land Registry. It may be up to as much as £920 for properties that are worth more than £1 million
  • Survey fee and valuation charges
  • Stamp duty land tax
  • The charges required for carrying out enquiries and searches of public bodies. This forms an integral part of the purchase process


Apart from these, investors also need to take stock of the expenses involved in seeking legal advice on the property transaction and also devising investment vehicles. Investors also need to focus their attention on issues such as tax and structuring. It is necessary to seek early advice when it comes to structuring your investment in commercial property in UK. These will help to lower the tax costs and help to make the investment more attractive and thus prevent the possibilities of a possible exit later on. Businesses which are not yet ready to take the plunge yet can test the waters with UK serviced offices available on a lease or on a rental basis.

Author Bio: Steven Hayes is a business consultant based in Hampshire. He outlines the reasons, which make the region a favoured destination for developing a commercial property in UK.