They are looking to offset tax burdens and enhance yields
Amid the complexities of commercial property investment and recent budget changes, Miles Wallace (pictured), of The Commercial Branch, has been guiding his clients with a sharp focus on strategic adaptability. Wallace notes a shift among investors toward retaining and refurbishing properties to mitigate tax burdens and enhance yields.
“Many clients, particularly those with larger portfolios, are choosing to hold on to their assets and work on increasing their yield rather than selling and starting fresh,” he said.
Wallace highlighted the intricate challenges posed by taxes such as Stamp Duty Land Tax (SDLT) and Capital Gains Tax (CGT). For clients navigating this terrain, his advice is unequivocal: seek specialised guidance.
Stamp duty relief
“There are over 85 different relief mechanisms available for stamp duty,” Wallace explained. “But conveyancing solicitors shouldn’t—and often don’t—provide advice on these due to the complexity involved. It’s essential to engage independent property tax specialists.”
Such expertise has delivered significant benefits to Wallace’s clients. He recounts the experience of a developer who successfully reclaimed substantial SDLT sums on purchases made in the previous four years, with the assistance of professional tax advisors. “We managed to recover £230,000 for him, which is incredible,” he said.
As refurbishment and value-add strategies gain traction, Wallace has observed a growing demand for innovative commercial mortgage products. One particularly impactful offering allows for 75% NET loan-to-value on the purchase price and an additional 100% of refurbishment costs. Wallace describes this as a “very new product” that is reshaping the financing landscape for investors. However, he warns of the pitfalls of dealing with unreliable lenders.
“The financial market is saturated with institutions posing as lenders,” he cautioned. “We only work with trusted, consistent partners.”
Wallace’s insights extend to the types of commercial properties capturing investor interest. He highlights the rise of co-living spaces, which combine affordability for tenants with strong yields for landlords.
“Co-living spaces are essentially clusters of studio flats with shared amenities,” Wallace explained.
‘We’ve had success with properties tailored for niche users’
Conversely, office spaces present a mixed picture. Traditional office leasing is less prevalent, with most interest coming from investors seeking to convert offices into residential units or smaller multi-use spaces.
“We’ve had success with properties tailored for niche users—psychologists, architects, or small businesses sharing a building,” he said. “These setups reduce risk compared to large single-tenant offices.”
The retail sector, particularly high-street locations, faces significant headwinds, with many properties being converted into residential use. Wallace described this area as “a sad place”, reflecting the broader challenges facing brick-and-mortar retail. Meanwhile, industrial properties remain a niche but profitable segment for experienced investors who understand market dynamics and tenant relations.
‘It’s a completely different world’
Reflecting on his journey into commercial finance, Wallace underscores the long learning curve and financial resilience required. Transitioning from residential mortgages to commercial brokerage was a leap he took nearly a decade ago.
“For the first two years, I made no income from commercial deals,” he admitted. “I wouldn’t have survived without the income from residential mortgages and the support of my growing team.”
His advice for residential brokers considering a move into commercial finance is pragmatic.
“It’s a completely different world,” he said. Deals take longer—sometimes up to 12 months for transactions exceeding £2 million—and require meticulous planning and patience. However, the rewards are tangible for those willing to persevere and build the necessary expertise.
In an industry shaped by evolving regulations, technological advancements, and shifting market demands, Wallace’s approach is rooted in adaptability and professionalism. Whether steering clients through tax complexities, identifying lucrative financing solutions, or exploring emerging property trends, his commitment to strategic guidance remains unwavering.
“It’s about connecting the dots,” Wallace concluded. “That’s what makes a good commercial brokerage.”
