As we make our way through Q1, there are sure signs that the commercial property investment market is making a significant comeback. With the right finance deal in place, there are good opportunities for investors. The question is, where are they?

The fast pace of vaccination and growing optimism of a return to some form of normality, coupled with a more settled relationship with the EU and low interest rates, are key factors behind a positive outlook for the commercial property market.

These factors are expected to accelerate market growth in the months ahead, with investment set to reach almost £50 billion according to real estate company CBRE, an increase of nearly a third over spending in 2020.

Go regional: where to look for commercial property deals

This is welcome news for investors after a very bumpy 2020. So, what are the best investments? Interestingly, as 2021 unfolds, more attention is being paid to location. London has always been a key focus but after an extremely challenging year, horizons appear to be broadening.

Notably, there is growing interest in commercial property in the country’s major regional cities, such as Birmingham, Manchester and Newcastle. These markets haven’t been affected to the degree that London has and, crucially, are firmly in the affordable category, whether in terms of residential, retail or other commercial letting.

That is not to say London is without commercial property opportunities – the capital is still attracting significant overseas interest – and the market will undoubtedly recover as living and working conditions normalise.

Commercial property sectors – where the opportunities are

In terms of commercial property sectors, large distribution warehousing and healthcare property continue to be among the most attractive, thanks largely to key trends in consumer behaviour and care and healthcare provision.

A lot has been said of late about residential investment property and it is true that the market has been affected by rising house prices in recent years and the pandemic, but the sector still holds good opportunities for investors, particularly those with a long-term view.

Tellingly, Rightmove is currently forecasting housing growth of 4% in 2021, with pent up demand for moving a key driver, alongside improved political and economic conditions. This makes sense as the population continues to grow and there remains too few houses; both of which are trends that are unlikely to change any time soon.

For property investors looking to growth their portfolios in 2021, flats and houses located close to transportation hubs, central shopping facilities, universities and hospitals are the most attractive, with young professionals and students primary renter groups.

How to fund commercial property investment in 2021

The light at the end of the tunnel is getting brighter and for astute and well-organised property investors, there are attractive deals available. Importantly, the continued absence of less experienced players is helping to make good investments easier to identify and make.

Also, in 2021, more so than ever, accessing finance on the right terms and in the right timeframe is vital to being able to take investment opportunities. This makes choosing the right commercial loan and mortgage lender essential.

When making this choice, look for a lender makes you aware of all the available finance options. This should include the services of alternative lenders – greater flexibility and a less automated and more personalised approach are making this type of lending increasingly attractive to investors.

To find out more about A&T Business Associates services for commercial property investors, contact Tony Hedger on 01903 602211 or tony.hedger@atbusinessassociates.co.uk.