Local retail properties ''better than prime estate'' - commercial mortgages

07 September 2007

Property owners with commercial mortgages looking to increase the size of their portfolios should consider investing in off-prime properties, a new study shows.

Research conducted by Investment Property Databank (IPD) has found that capital market growth within the sector had been greater and faster over the past decade than in prime retail areas.

Growth rose by 600 per cent over the past ten years to stand at £4.3 billion compared with prime retail growth of just 46 per cent, the study added.

Total returns for off-prime properties also rose faster and saw higher yields, IPD asserted.

"Over the long-term local shop investments have consistently delivered stronger annual total returns and lower volatility than the IPD All Standard Shops benchmark," commented Dr Richard Doidge, research consultancy director at Colliers, the firm which previewed the report, according to the Retail Bulletin.

"This is due to local shopping being more resilient to economic downturn and major comparison shopping competition," Dr Doidge added.

The news comes as the Bank of England has announced that the base rate of interest will remain at 5.75 per cent for the second month in a row.