One-in-five (19%) landlords are considering diversifying into commercial property, according to the latest research from Shawbrook.
More than one-third (37%) of landlords planning to invest in commercial property cited diversification as the key reason for future-proofing their portfolios.
Those who already own commercial properties are also planning to expand, with 35% of landlords with commercial assets looking to invest in more.
Some 36% of all landlords said they had noticed the rise in demand for commercial property and view it as a good investment opportunity, but one-quarter believe there is a lack of good-quality properties available for businesses, highlighting the potential need for development or conversion work.
Many landlords (29%) see the opportunity to branch into commercial property as a chance to support their local community, with many planning to invest in small (33%) and large (30%) retail space.
Shawbrook suggested that landlords could play a role in the revival of the high street and town centres across the UK.
Emma Cox, managing director of real estate at Shawbrook, said: “Fluctuating prices and high borrowing costs are hampering confidence in the residential property sector.
“As a result, landlords are looking for other ways to diversify their portfolios and cater for current demand.
“The increase in workers returning to offices and the evolution of local high streets are two examples of areas where landlords will be seeking opportunities to invest, and those who already own commercial properties will be looking to add more.
“Landlords could become the unsung heroes of the high street, with many planning to support their local communities by injecting new life into commercial properties and retail units.”
“Commercial property is certainly a good prospect for those who have typically specialised in the residential market and are looking to adapt their strategies now or in the near future.”
