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Onward and upward: the 2021 commercial property investment market

The commercial property investment market was hit by numerous disruptions in 2020, but notable resilience and key pockets of growth point toward a much brighter 2021. With the right finance in place, there will be opportunities for investors to take.

What lies ahead for the commercial property investment market?

The commercial property investment market is set to benefit from greater economic and political certainty in 2021, as the country feels the impact of mass vaccination and the consequences of Brexit, deal or no deal, become clearer.

This greater clarity is expected to allow the commercial property investment market enjoy a sustained period of recovery, allowing it to build on the momentum that was visible in 2020, but was interrupted by Covid-19 restrictions and the uncertainty surrounding Brexit negotiations.

Prior to the second round of lockdowns in the last quarter of the year, the commercial property investment market was recovering well, posting strong growth in the autumn after a difficult spring and summer.

Where are the key commercial property investments for 2021?

Looking ahead, large distribution warehousing is set to be a key growth area for commercial property investors. The switch from high-street shopping to online purchasing is the main driver here, with consumer behaviour unlikely to revert en masse to pre-Covid patterns.

Healthcare property is another market that is expected to perform well in 2021, fuelled by continuing invest in care homes and private hospitals, as well as a growth in demand in areas such as mental health and children’s services.

Office property is expected to recover, performing better in the second half of the year, with similar development forecast for the residential investment property sector. In both cases, location will be a key factor, with proximity to transport links and amenities important for businesses and workers for which remote working it set to remain a significant practice.

Another key trend in commercial property investment in 2021, across all the sectors, will be a greater focus on environmentally friendly building and development, with socially responsible thinking and policies becoming an increasingly valuable market asset.

Commercial property investment in 2021 and the role of alternative lenders

For property investors to take opportunities in 2021 and exploit key trends in the commercial and residential property sectors, they will need to access finance on the right terms and in the right timeframe.

With this in mind, using the right commercial loan and mortgage lender will be vital. Your lender should be aware of and offer you access to all the finance options available. Notably, more property investors are turning to alternative lenders to get funding because of the greater flexibility and the less automated and more personalised approach that they offer.

The year ahead is set to be a key one for the commercial property market and whatever the target sector, in order to make the right decisions and take the right steps, it is vital that serious investors have the full picture when it comes to finance.

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.

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