Commercial property experts believe the market has bottomed out
following a difficult few years. Savvy investors should take this
opportunity to create above average returns.

This news comes as UK commercial property prices rose for the
first time in a year and a half in May, as a result of a boost in
the office and industrial sectors.

UK commercial property values have been declining since November
2011, falling by a total of 4.9 per cent. However, last month
showed marginal rises of 0.6 per cent, according to real estate
firm, IPD:

"It may seem like insignificant growth, but this is an important
milestone for the UK property market," said Phil Tily, Managing
Director of IPD for the UK and Ireland.

Damian Lloyd, a director at commercial property agency GVA,
added:

"That [the bottom of the cycle] may continue for two or three
years but there have been a number of insolvency situations to take
advantage of. Rents will start to rise and investors will see
opportunities."

John Woodman, senior partner at property surveying firm Malcolm Hollis, feels that
commercial yields of 7-10 per cent are fully achievable, with
opportunities even higher for secondary commercial units in
particularly high demand.

"After the double dip recession and a fall in values of over 37
per cent, UK property has finally, painstakingly, clawed itself
back to growth."

Commercial property has flexibility advantages over residential
property in that tenants tend to stay longer and there are fewer
management costs involved.  The paucity of available
high-quality space also means that competition for attractive
investments is high, pushing up returns for the shrewdest
buyers.

Damien Lloyd spoke of a requirement to know the market you are
investing in, with local knowledge and a competitive eye key to
achieving good returns:

"Small investors should look at their local area where they see
things they understand and know are priced well. You need to fully
understand the supply and demand dynamic as you are stepping into a
market that may have a lot of competition."

However, landlords need to continue to offer flexible leases,
with tenants likely to be looking for shorter-term occupancies.
Landlords need to understand their tenants' business needs, says
Jeremy Gidman, head of Carter Jonas's investment and management
team:

"Commercial property takes up more of a private investor's time
as you have to actively look after it. You need to engage with your
tenants to keep them in the building.

"Being much more customer-focused is very important. All the big
landlords are doing that now."


Regional declines have slowed substantially in recently months,
which has allowed the market to small but significant growth. London, inevitably, has been a key driver of
renewed optimism for the UK commercial property sector.

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