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The South West Specialists

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Pension Reforms: Choosing the right property investment


The Government Pension Reforms are now in place allowing those over 55 to access their pension fund in order to facilitate alternative investment plans. Property will be, together with stocks and shares etc, a common avenue for investors. While a number of those looking at property will focus on the residential sector those looking for higher returns, of 6-10%, as a net initial yield will look to commercial property. The recent proposals for tax relief on “buy to let” investments make the returns on commercial property event better in comparison to the residential market. Commercial property investments appropriately set up are not affected by the Chancellors proposals.

Those with a significant pension fund available, can increase these if they access additional commercial funding to top up their pension fund, will have a variety of commercial sectors available in which to invest. Those with smaller pension funds may wish to co-join with others to produce a fund that enables acquisition of properties with better yields or to invest in a portfolio of properties across different sectors in the market or within different geographical regions and thus spread the risk. Your financial advisers will be able to put in place appropriate mechanisms for this.

Investing in the commercial property sector requires careful analysis of a variety of factors:-

• Initial yield
• Tenant covenant
• Break clauses
• Client and landlord responsibilities for repair
• Assessment of whether the property is over-rented/under-rented
• Liabilities at the end of the lease
• Assessment of potential for re-letting/re-sale in the current or future markets.

In addition to the above there may be the ability to improve the asset with strategies focused on:-

Enhancing the lease covenant
Strength of tenant covenant
Relocating tenants within a multi-let building/site to enhance future rents and yields
Enhance and develop the site

Detailed advice on investment and management of the asset is required throughout the life of the property cycle. Vickery Holman are able to provide advice via their agent, investment, commercial property and building surveying departments to fulfil all of these requirements as a seamless service.

In addition to investment opportunities there are pure development opportunities also to consider, again our land and development department can assist with these opportunities. We are actively looking at developing consortiums for this type of venture.

Vickery Holman are willing to work with you, your legal and financial advisers, or can provide recommendations of others who are pro-active and experienced in the pension advice market. Vickery Holman have been providing purchase advice, asset management advice and managing properties for more than the 25 years in our current incarnation with a history going back to 1850. The burgeoning pension funds coming to the market will create bubbles in the market and robust advice is required in order to ensure your investment is able to provide a long term return at an appropriate rate for the risk you are willing to undertake. For any initial advice please contact:-

Mike Oldrieve 01752 273836
Alan Treloar 01872 245604
Mark Pellow 01392 453019
Dennis Venn 01752 273837
Greg Oldrieve 01392 245603