Why invest in retail investments
Category Industry News
Looking to invest in property and don't know where to start? You've come to the right place. Harcourts Dunn Commercial has a wealth of expertise in the retail property market. Statistics indicate that retail properties experience longevity in the market and have higher chances of success as start-ups. We take a look at the details that make retail investments a good idea.
Why retail?
With retail property investments, you will experience high returns. As rental rates are more substantial for commercial buildings than residential ones, you will be able to charge a premium for prime areas. Retail property investors have the luxury of renting, leasing, managing or selling their properties for everything from pop-up stores to large shopping malls. You can have a diverse portfolio of businesses listed under your ownership. From beauty salons to clothing stores, restaurants and more. Owning your own retail property also lowers your personal costs if you want to open your own business, as you will already own the space.
Retail maintenance pros
If your retail property comes fully equipped and furnished with whatever a business needs, you will be able to charge a high rental. If the property is in excellent condition and in a sought-after, busy location you are able to charge even higher rates to cover any maintenance you could be liable for. Retail properties that are unfurnished are also appealing if you prefer to take on tenants with shorter leases or want to keep your options open to new, more popular businesses that may want to rent the space. Retailers who lease these properties want to attract as many customers as possible, so it is in their best interests to keep the place looking sharp. This ensures that the property is always well-maintained. In turn, your property value does not depreciate and your retail property remains a valuable investment.
During busy seasons, retailers will be operating longer than usual. However, these times are still shorter than a conventional commercial or industrial property within a similar investment range.
Do retail investors have to be financially savvy?
Yes and no. In order to be a retail investor one needs to understand the area in which your property is located, the consumer habits of those who spend at the stores you've leased and your personal financial situation. Once you've decided you're going to put your money into a retail property, you don't need to have a huge portfolio of previous investments behind your name. All you need is the capital, a solid list of retail businesses willing to sign leases and a safe, secure building.
Setting up the correct foundations for your retail store
While anyone can sell anything out of their kitchen window, retail property investors have to be a little more careful with where they decide to let people open up shop. Each municipality and district has its own set of zoning laws and building regulations. These need to be strictly adhered to for the sake of your retailers. Setting up a significant retail building in a place where it is prohibited could mean mountains of legal fees and be a major setback in your profit margin. It is always safest to buy an existing retail property in the commercial sector rather than go through the time-consuming and costly process of building your own.
Retail in South Africa
2023 has seen a steady rise in the demand for convenience stores, health and wellness shops, on-the-go outlets, fast food and basic services. As the population grows and more people enter the workforce in the retail world, demand for these properties will always be there. Harcourts Dunn Commercial has a number of commercial properties for sale and retail properties to let.
Author: Harcourts Dunn Commercial
