When it comes to commercial property, whether it’s a warehouse, office space or other industrial premises for your business, you can either choose to rent or buy. Both have their pros and cons. When deciding which option is best for your business, the first thing to consider is the returns that the property offers versus the regular operating yields that your business generates. The general benchmark for commercial property is an annual return of between 10% and 18%.
If your business’s internal rate of return is higher than the returns generated through property holdings, then your business should rather look to rent premises for an extended period. If it’s the other way around, then purchasing commercial property would make more sense.
If you decide that purchasing commercial space for your business makes sense, or you’re looking to build up investment property assets, we would recommend consulting with experienced property practitioners.