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CASHKING

Str Of Industrial Unit - Does This Make Sense?

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Morning from Devon,

Firstly thanks to everyone who spends time posting here. In a way its changed my families life for the better having taken the time to sell Spring 2005 and put money into the stock market.

Right, I have a business importing high quality goods from Germany and have national coverage. Almost all my business is internet based and i see very few customers face to face. I own outright an industrial unit which is used for storage. This i bought in 2002, and has gone up i suppose 25%. I can still operate as efficiently by renting storage space(i.e charged by the pallet) in a hauliers secure units.

Whould it make sense to turn my unit into equity which i can earn 5% on deposit, and avoid triggered expenses like astromonical insurance(i would fall under the haulier insurance policy), business rates, heating, etc.?

I know we talk about house's falling in value in a crash, but in my case i can see equally large falls in the value of industrial units as businesses go to the wall, and a glut of units unoccupied. Already in the commercial press there are loads of units for sale.

Has anyone on this site done this already and for others does my plan look good.

I know recession is just around the corner. In fact my sales are 40% down on this time last year, so i am getting the house in order.

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To continue,

I have been speaking to various commercial estate agents and some intresting things came to light.

1.) Forget trying to rent as their is so much on the market and yields are not worth it.

2.) Commercial agent are incrediable busy taking on new instructions to sell. Takes over a week to get my local agent to come and take a look.

Is this not an indication of companies realising that things are going downhill and its time to sell up or as most industrial units are owned by pension funds or banks and then rented out in the past on 10% yields that its time to leave the game.

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Has anyone on this site done this already and for others does my plan look good.

I know recession is just around the corner. In fact my sales are 40% down on this time last year, so i am getting the house in order.

I have no experience, but as you paint the picture, you don't seem to lose if nothing happens, and if things fall, then you win, so why not (though perhaps your second post implies that it may not be so easy to do),

Peter.

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Thanks Blue Peter,

I know what you mean about if things go down i don't actually suffer any negative equity. The point is if other businesses are suffering around you, things go downhill fast - crime, and social problems. Decaying industrial parks are the worst place to be during a reccesion. Anyone remember the last time and this sort of thing happening.

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Is this not an indication of companies realising that things are going downhill and its time to sell up or as most industrial units are owned by pension funds or banks and then rented out in the past on 10% yields that its time to leave the game.

A friend who works in commercial property can shed some light on this.

Apparently it all comes back to the governments pension regulation forcing funds to hold a high % of the funds in safe assets. This has two effects:

Yields on gilts have gone through the floor as they chase a relatively small pool of government borrowings (is this a stealth tax or just an unexpected consequence).

Pension funds have been piling into commercial property in a big way, again driving yields through the floor

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  • 301 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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