Commercial premises are the asset with the widest gap between potential yield and the risk of standing empty. In high-demand areas, they can generate gross yields of 8-12%. In weak areas, they can sit empty for years. Here is the analysis of when they're worth it.
Advantages of commercial premises over homes
- Higher yield: 2-3 points above residential in the same area
- More stable tenants: A business has a lot to lose if it loses its premises
- Longer leases: 5-10 years, with fewer protections for the tenant
- Less wear and tear: Commercial premises deteriorate less than a lived-in home
The specific risks
- Longer, more costly void periods when the tenant leaves
- The impact of e-commerce on retail premises
- Greater dependence on the area and on footfall
Which types work best in 2026
The safest: hospitality in established residential areas, healthcare premises (clinics, pharmacies), local supermarkets and personal services (physiotherapy, hairdressing, boutique gyms). The riskiest: fashion retail and stationery shops.
Explore commercial assets: Go to RadarPro for analysis of commercial assets at auction and bank-owned properties.
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