Commercial landlords eye growth opportunities outside of London

The commercial property market sees a boost outside of London as investment continues to grow.

Research by Together reveals Manchester is a key hotspot and achieves high yields for BTL landlords.

The property lender also reveals there is a growing appetite for student housing in UK cities.

Rental yields rise in Manchester

A report by Together reveals, in the next 12 months, a third (33%) of BTL landlords with properties in Manchester expect to see their rental yields increase by up to 10%, with 19% expecting to achieve between 10% and 25%.

A smaller proportion, 8%, said they expected rental yield growth of between 26% and 50%.

The report also found that more than 77% of commercial landlords and property developers believe investing in retail spaces in Manchester over the next five years represents a strong opportunity.

Around 40% said semi-commercial properties such as flats above shops offer significant potential.

Birmingham and Glasglow emerging as hotspots for commercial property

Another area outside of London seeing a rise in commercial landlord activity is Birmingham.

According to research by Together, 70% of commercial landlords believe investing in office space in Birmingham presents a strong opportunity over the next five years.

The same proportion also sees retail units as a worthwhile investment, while 78% said student housing or Purpose Built Student Accommodation (PBSA) offers the best potential for achieving higher yields.

Glasgow is emerging as a hotspot for commercial property, with Together’s survey revealing that nearly all respondents (98%) have considered semi-commercial properties in the city as an investment opportunity.

Optimism across the commercial property market

Ryan Etchells, chief commercial officer at Together, said: “Our research highlights an overall optimism across the commercial property market.

“While London continues to retain its appeal for commercial property investors and developers, it’s clear there are regional cities that are becoming increasingly attractive and we would expect this interest and investment to continue over the next five years.

“There is a sense that the commercial property sector has turned a corner, with a shift back to office or hybrid working, business confidence rebounding to its highest level in nine months, and renewed optimism over growth in the UK’s economy, all positive signs.”

Mr Etchells adds it’s important for commercial landlords to explore flexible lending options.

He adds: “It’s crucial property professionals continue to seek out flexible financial support to help them seize opportunities to grow and diversify their commercial portfolios, ensuring they can leverage all available opportunities – and the specialist lending sector is in a prime position to provide the finance needed to achieve their ambitions.”

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