Commercial properties are real estate assets that are intended to generate a profit, either from capital gains or rental income. They include office buildings, apartment buildings, residential rental housing, and businesses for sale. Investing in commercial properties can offer several benefits for investors, such as:
- Higher rental yields: Commercial properties tend to have higher rental rates than residential properties, as they are leased to businesses that can afford to pay more. According to leading financial institutions, commercial property returns range between 6 – 12% annually, while residential property returns are typically around 1 – 4%.
- Long-term capital appreciation: Commercial properties can increase in value over time, as they are influenced by factors such as supply and demand, location, economic growth, and inflation. An advantage of commercial real estate is that it can offset the long-term impact of inflation, as property rents can be adjusted with inflation.