Welcome to www.shopinvestment.co.uk : possibly the only free resource about investing in shop property in England and Wales.
Probably the most lucrative asset class, investment in shop property can be rewarding, providing you know what you are doing! Many investors like to think they do know, but invariably find out the hard way that they do not: for example, when, after coming up against me or another experienced surveyor advising the tenant, the outcome is not what they had in mind; or when an investment bought using a mortgage plummets in value and the bank wants its money back, or when the tenant vacates or goes bust and the landlord ends up with an empty building. Much of what goes wrong is self-inflicted: from naivety, inexperience, gullibility, to simply not listening to what the investor doesn’t want to hear.
Commercial property is not like investing in the Stock Market or buy-to-let residential property, and shop property not like any other type of commercial property. How you go about buying and selling shop property requires skill and experience, not only in the art and science of timing, but also in interpretation and use of business tenancy law and rental valuation. It’s no good jumping to conclusions or gauging prospects for the market based on media comment, or buying whatever takes your fancy: for example, a difference in value can exist between a property and an investment; a trading position may not be all it seems; how much you could buy the proposition for now compared to what it was priced at not that long ago may not be good value. Of all the mistakes investors make when buying a shop property investment, possibly the three biggest are: 1) buying on yield; 2) buying on the tenant's covenant; 3) misunderstanding “upward-only rent review”.
Unless you are a property dealer, in which case you really do have to have wits about you, investor thinking tends to be for long-term investment, often buy to keep indefinitely. Long-term successful investment in shop property is about understanding the forces at work: from the dynamics of the retail sector to the practical consequences of business tenancy law and shop rental valuation. Naturally, the market has its ups-and-downs but to avoid coming unstuck in times of change, you have to “see” beyond the obvious, work out what’s going to happen and why, and then apply in-depth knowledge and practical experience.
I’m Michael Lever; a commercial property surveyor, I specialise in rent review and business tenancy advice for landlords and retailers in England and Wales, and have dealt with more than 5000 commercial properties. Involved in the commercial property market since 1967, and renowned for my contribution to market intelligence and professional wisdom, (many of my original ideas nowadays pervade popular thinking), in 1984, I published a booklet, reprinted 1988, entitled “Investment in Secondary Shops” and in 1988 “How to Read an Auction Catalogue”; more than fifteen hundred booklets were sold and many landlords have used my services ever since.
Because the long-term is a long time, problems in the making can take a years to manifest and may not be apparent until long after the obvious has faded away. In 1995, in my essay on the Future of Town Centres and Retailing, and for which I won a prize in a competition sponsored by Marks & Spencer, I reasoned the underlying problem at a macro-level is a conflict between whether the British economy is fundamentally capitalist or socialist. On one hand, the role of capitalism is to weed out; on the other, socialism steps in to prevent falling by the wayside. Progress suffers from being driven with the brake on, with too much duplication and compromise, and not enough original thinking and consistency in direction. Consequently, it only needs a few to seize the moment for the rest to flounder. In an atmosphere of competition it is illogical to expect every retailer to be successful, and not every property is going to be a good investment.
Amongst my talents is a knack for reading between the lines and listening to what is not said, and much of the outpouring of media and industry commentators I wrote about years ago in my newsletters. Fact is, in retailing, demand has been polarising for decades. In 1984, I wrote about changes in the offing, and how to identify the warning signs of a location and trading position in decline; in June 1989, I said that the emergence of the “Green’ consumer marked the onset of a major shift in attitude that would have repercussions for all aspects of future retailing; in 2010, I said the era of mass-market multiple retailing is over and the consequences are going to have far-reaching repercussions for investment performance; nowadays, the decline and fall of the mass-market multiple retailer is already making its presence felt.
To get the best out of Shop Investment, the content is designed to be read in numerical order, starting with Introduction. For ease of reference, I have numbered the tabs. Simply click on a tab and the content will appear. (Use of this site assumes you have read the Disclaimer so please do.)
If you have any questions, or need more explanation, then please contact me at 01531 631892 or help@michaellever.co.uk and if you would like more information about the services I provide please visit my main website www.michaellever.co.uk or click here
I look forward to helping you in some way.
Michael Lever
PS - I am in the process of adding and editing content and hope to complete by the end of February 2012; the latest update is shown at the foot of this page.
Probably the most lucrative asset class, investment in shop property can be rewarding, providing you know what you are doing! Many investors like to think they do know, but invariably find out the hard way that they do not: for example, when, after coming up against me or another experienced surveyor advising the tenant, the outcome is not what they had in mind; or when an investment bought using a mortgage plummets in value and the bank wants its money back, or when the tenant vacates or goes bust and the landlord ends up with an empty building. Much of what goes wrong is self-inflicted: from naivety, inexperience, gullibility, to simply not listening to what the investor doesn’t want to hear.
Commercial property is not like investing in the Stock Market or buy-to-let residential property, and shop property not like any other type of commercial property. How you go about buying and selling shop property requires skill and experience, not only in the art and science of timing, but also in interpretation and use of business tenancy law and rental valuation. It’s no good jumping to conclusions or gauging prospects for the market based on media comment, or buying whatever takes your fancy: for example, a difference in value can exist between a property and an investment; a trading position may not be all it seems; how much you could buy the proposition for now compared to what it was priced at not that long ago may not be good value. Of all the mistakes investors make when buying a shop property investment, possibly the three biggest are: 1) buying on yield; 2) buying on the tenant's covenant; 3) misunderstanding “upward-only rent review”.
Unless you are a property dealer, in which case you really do have to have wits about you, investor thinking tends to be for long-term investment, often buy to keep indefinitely. Long-term successful investment in shop property is about understanding the forces at work: from the dynamics of the retail sector to the practical consequences of business tenancy law and shop rental valuation. Naturally, the market has its ups-and-downs but to avoid coming unstuck in times of change, you have to “see” beyond the obvious, work out what’s going to happen and why, and then apply in-depth knowledge and practical experience.
I’m Michael Lever; a commercial property surveyor, I specialise in rent review and business tenancy advice for landlords and retailers in England and Wales, and have dealt with more than 5000 commercial properties. Involved in the commercial property market since 1967, and renowned for my contribution to market intelligence and professional wisdom, (many of my original ideas nowadays pervade popular thinking), in 1984, I published a booklet, reprinted 1988, entitled “Investment in Secondary Shops” and in 1988 “How to Read an Auction Catalogue”; more than fifteen hundred booklets were sold and many landlords have used my services ever since.
Because the long-term is a long time, problems in the making can take a years to manifest and may not be apparent until long after the obvious has faded away. In 1995, in my essay on the Future of Town Centres and Retailing, and for which I won a prize in a competition sponsored by Marks & Spencer, I reasoned the underlying problem at a macro-level is a conflict between whether the British economy is fundamentally capitalist or socialist. On one hand, the role of capitalism is to weed out; on the other, socialism steps in to prevent falling by the wayside. Progress suffers from being driven with the brake on, with too much duplication and compromise, and not enough original thinking and consistency in direction. Consequently, it only needs a few to seize the moment for the rest to flounder. In an atmosphere of competition it is illogical to expect every retailer to be successful, and not every property is going to be a good investment.
Amongst my talents is a knack for reading between the lines and listening to what is not said, and much of the outpouring of media and industry commentators I wrote about years ago in my newsletters. Fact is, in retailing, demand has been polarising for decades. In 1984, I wrote about changes in the offing, and how to identify the warning signs of a location and trading position in decline; in June 1989, I said that the emergence of the “Green’ consumer marked the onset of a major shift in attitude that would have repercussions for all aspects of future retailing; in 2010, I said the era of mass-market multiple retailing is over and the consequences are going to have far-reaching repercussions for investment performance; nowadays, the decline and fall of the mass-market multiple retailer is already making its presence felt.
To get the best out of Shop Investment, the content is designed to be read in numerical order, starting with Introduction. For ease of reference, I have numbered the tabs. Simply click on a tab and the content will appear. (Use of this site assumes you have read the Disclaimer so please do.)
If you have any questions, or need more explanation, then please contact me at 01531 631892 or help@michaellever.co.uk and if you would like more information about the services I provide please visit my main website www.michaellever.co.uk or click here
I look forward to helping you in some way.
Michael Lever
PS - I am in the process of adding and editing content and hope to complete by the end of February 2012; the latest update is shown at the foot of this page.