Commercial Property Investment for SSAS Pension - Quick Check Please

Please I need an advice concerning a potential SSAS investment.  Your advice is always appreciated It is a choice between a commercial investment rented to a relatively known and long staying Pharmacy in the Midlands and another one rented to an equally long staying Mechanic Workshop tenant in the North. Both Commercial properties have a very similar yield  with  active long lease contracts with both tenants. (The one with the Mechanic Workshop tenant has 15 years remainig on the lease contract while one with Pharmacy has 9 years remaining.) All other things being equal, which one do you advise I go for as a long term investment?

Comments

  • Assuming both are limited companies, your first port of call should be their respective filings at Companies House. You will want to peruse their annual accounts to get a sense of profit and loss, cash at bank, debtors/creditors etc. To what extent have they ever been  late with their filing obligations, any petitions to strike the companies off the register etc.

    As to the properties themselves, is the pharmacy on more than one floor, if so does it occupy all floors and is their residential conversion options in the event you lose the tenant.

    Just as an observation, I specifically avoid small businesses when looking at commercial investment opportunities, I only consider large Plc tenants ( preferably LSE quoted entities) with strong balance sheets, deep pockets, and buildings with good residential conversion options should the tenant decide not to renew the lease in the event commercial reletting opportunities of the entire building prove challenging.

    Needless to say you should be cognizant of the building's current EPC ratings and potential problems with future lettings where it is rated below C.

    Good luck with your foray into this complex area of investment!


  • xylophone
    xylophone Posts: 43,837
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    Please I need an advice concerning a potential SSAS investment. 

    In commercial property?

    https://www.mandg.com/dam/pru/shared/documents/en/frpb10006.pdf


    Consult an expert?

  • krissy08
    krissy08 Posts: 381
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    xylophone said:
    Please I need an advice concerning a potential SSAS investment. 

    In commercial property?

    https://www.mandg.com/dam/pru/shared/documents/en/frpb10006.pdf


    Consult an expert?

    Thanks. An Expert in SSAS is already my Pension Administrator, except Administrators are not allowed to give a direct advice on actual purchase decisions. I was hoping for someone who is actually experienced in SSAS Investment itself. Thanks again
  • xylophone
    xylophone Posts: 43,837
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    except Administrators are not allowed to give a direct advice on actual purchase decisions.

    Exactly. So consult an expert in property investment?

    You will note the references in the M&G Guide above to professional advice  from your own IFA/solicitor/valuer etc in resect of property to be held within the SIPP.

  • jimjames
    jimjames Posts: 17,494
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    krissy08 said:
    xylophone said:
    Please I need an advice concerning a potential SSAS investment. 

    In commercial property?

    https://www.mandg.com/dam/pru/shared/documents/en/frpb10006.pdf


    Consult an expert?

    Thanks. An Expert in SSAS is already my Pension Administrator, except Administrators are not allowed to give a direct advice on actual purchase decisions. I was hoping for someone who is actually experienced in SSAS Investment itself. Thanks again
    For clarity you've asked for advice in the OP as well, this forum (indeed any forum) isn't qualified to give advice. People might be able to give guidance and suggestions but ultimately you'll either need to decide yourself or employ someone who is qualified to give you that advice if you're not comfortable doing it. As I see it there are risks with both options, pharmacies seem to be struggling with costs so might not be viable long term. Mechanics might be impacted by move to electric cars and change in knowledge required.
    Remember the saying: if it looks too good to be true it almost certainly is.
  • jimjames
    jimjames Posts: 17,494
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    krissy08 said:
    xylophone said:
    Please I need an advice concerning a potential SSAS investment. 

    In commercial property?

    https://www.mandg.com/dam/pru/shared/documents/en/frpb10006.pdf


    Consult an expert?

    Thanks. An Expert in SSAS is already my Pension Administrator, except Administrators are not allowed to give a direct advice on actual purchase decisions. I was hoping for someone who is actually experienced in SSAS Investment itself. Thanks again
    For clarity you've asked for advice in the OP as well, this forum (indeed any forum) isn't qualified to give advice. People might be able to give guidance and suggestions but ultimately you'll either need to decide yourself or employ someone who is qualified to give you that advice if you're not comfortable doing it. As I see it there are risks with both options, pharmacies seem to be struggling with costs so might not be viable long term. Mechanics might be impacted by move to electric cars and change in knowledge required.
    Remember the saying: if it looks too good to be true it almost certainly is.
  • Who is your current administrator?
  • krissy08
    krissy08 Posts: 381
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    empowered 
  • krissy08
    krissy08 Posts: 381
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    sorry I have just seen this
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