Types of Commercial Investments
Offices/Warehouses/ Shops
These are often the entry levels of Commercial property investment and the lease terms normally start from 3 years with an option to renew for a longer term.
Retail Centers/Shopping Center
Most commercial investors like the CENTER investment because same as offices and warehouses, they are leased out on a net lease basis which means the tenant pays most of the outgoings. Other than that, the lease terms for center investment are longer and often start from 10 years or more and rents go up over time as fixed annual rent increases are built into the lease agreement.
Capital Market (Hostels/Resorts/Service Station/Childcare)
This asset class is not the best place to get started as it requires a large capital to start with, though it can be an excellent way to generate income and build long term wealth as most of this asset class has a 7% -12% rental return along with 10-40 years ongoing lease terms.
The downside for this asset class, once the lease is finished, it is very difficult to find a new tenant or large incentives will need to be provided by the landlord in order to secure a new lease, in most cases, the Landlord will consider selling or redevelop the asset.