Commercial Property Investment Far Outstrips Buy-to-Let

The richest property investors in the UK have grown their wealth by a record 40 per cent over the past 12 months alone, according to a recent survey.

That’s an increase of £300bn, says the magazine Estates Gazette – who compiled the survey and which lists 60 billionaires. This is compared to 10 billionaires in a 2009 edition of the magazine, such has been the massive profits accrued in commercial property investing.

Many of those who made the 250-strong list have invested, not simply in traditional residential buy-to-let but rather hotels, leisure centres, care homes and student properties. Top of the list, for instance was Zara owner Amancio Ortega who owns Devonshire House Hotel in Piccadilly. The Duke of Windsor, who earlier this year announced plans for a 190-room hotel in Westminster, came in at fourth place.

Student accommodation also scored highly in the investment property profit sakes with Sir Charles Dunstone (who founded Carphone Warehouse and now worth £1.7bn) making much of his wealth via luxury apartments for students.

According to a recent report in the Financial Times the sector is now worth around £200bn (10 years ago this type of investment was rarely considered).

Considering there is a massive undersupply problem – and a high-occupancy rate – it’s not that surprising, say property analysts. In fact, Savills puts returns at around 14 per cent. A report by the firm and which was issued this year, revealed £4.2bn had been invested in the sector over the past 12 months (a 70 per cent increase).

Another big property growth area is in care home investments – where yields of up to 10 per cent are promised (with the average cost of buying a room in a care home from as little as £35,000). 

Private investment in this area has grown rapidly. Two years ago a US hedge fund bought up 27 care homes in the UK. Investment in the care home front has also been forthcoming from such insurance giants as Legal & General and Aviva.

Loxley McKenzie, Managing Director at Colordarcy said: “The beauty of both hotel and care home investment and, to an extent, luxury student accommodation is that they are all hands-free investments. And there is usually a buy-back clause too. It’s difficult to go wrong here – especially considering the poor yields that your typical residential buy-to-let is bringing in.”

Investing in hotel rooms originated in the US. Impressive returns are to be had, provided the hotel is in a popular location and enjoys a steady stream of guests.

Compared to the residential housing sector yields are certainly much higher – around double in fact – and initial investment is lower. There are also fewer void periods and the properties are fully managed (meaning time poor investors can get on with other interests without having to worry about taking care of their investment).

Right now the UK is currently enjoying a high level of hotel investment, with rooms regularly occupied – thanks to the fact that tourist numbers are high and business occupancy, particularly in cities, has been flourishing again recently thanks to an upturn in the economy.

For advice and prospects when it comes to hotel, care home and student property investments contact us here at Colordarcy. We’d be happy to help you grow your wealth with opportunities to suit your lifestyle.

 

Notes to the editor:

Colordarcy is a leading property investment company that specialises in finding positive cash flow investment properties worldwide. Their aim is to provide their clients with properties that offer the unique combination of strong growth returns and cash flow positive income.

Investing in positive cash flow property significantly reduces the risk because the property will pay for itself regardless of market conditions, employment status or other financial commitments.

Colordarcy provides complete support before, during and after a sale, including finding tenants, financial assistance, viewing trips and currency services. Colordarcy are proud members of the “Association of International Property Professionals” (AIPP), and abide by its code of conduct, one established to protect the buyer, by ensuring members follow professional guidelines and procedures.

Colordarcy investment property portfolio includes some of the best properties for sale in Brazil, Florida and the United Kingdom.

For more information, supporting pictures or logo artwork, please contact:

Jill Stevenson
PR Manager

Email: press(at)colordarcy(dot)com

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