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  • Mortgages & Finance

    Commercial property advice

    I have stumbled across a commercial property deal in Glasgow that I would like to pursue but I'm unsure what is required and having looked online over the weekend I seem to be getting varying results.

    I currently own some commercial property but It is owned outright with no mortgages so I do not have experiance with commercial borrowing, I spoke to my current BTL mortgage advisor but he does not do commercial work.

    The site i'm looking at is a large building which is been split into 2 titles, The first unit (A) is 66% of the building and the second  (B) being 33%, The A portion is currently split into a large workshop and offices, while the B portion is let out currently in 5 individual units currently let out at 700PCM.

    The 2 yards are owned by 2 separate owners and the share the extensive land that comes with it, Divided by a fence, If I were too buy the 2 titles I would open the land up and rent 2 of the yards out as yard space and also add in around 50 shipping containers for self storage as the area does not have any facilities for this.

    I would also divide unit A up into 6 smaller units than is currently there as there is a high demand for small workshops in the area.

    In total I estimate

    6 Units@ £800PCM Each

    5 Units @ £700PCM

    2 Yards @ £600PCM

    50 Containers at £100PCM

    So the potential is there to make £14500 PCM if fully tenanted, There is a ground lease on the land with 83 years left at £10500PA

    The surveyor who has looked at it has estimated the value to be 450K in total for the entire land and buildings.

    The deal makes sense to me and I would like to move forward on it, Can anyone advise me what sort of deposit I would need to have in place to do a deal of this size and a likely APR on a capital and repayment mortgage.



    You are right to ask. The various complexities (having read the above briefly) mean that you are not able to look at the main stream lenders who are really just amending BTL terms. My initial thoughts would be 50 or 60%. But the yield is good so depending on the valuer you may be able to push that up a little.

    You should a repayment mortgage (although IO is possible).

    The APR will be broadly the same on a repayment mortgage as IO (fees are only a small proportion of a deal which of course you do not have to capitalise). I would expect the APR to be around 5.5% but it is possible to do better for the right deal.


    Chartered Accountant, Tax Advisor and Mortgage broker

    (and BTL portfolio owner)




    Small industrial units are a great move, thats a great strategy. I would start with your existing bank, put the deal to them as a starting point. Typically commercial lending is 60-65% but If you can manage with 50% it will attract the best rate. Perhaps securing the loan against the new & existing property might help you achieve this.

    It goes without saying you should take advice on best ways to structure purchase, but i guess you have already thought about this.

    Good luck.


    Phil Stewardson.

    Stewardson Properties.

    Stewardson Developments Ltd.

    Burson Land Ltd. & Jennings & Gilchreaste Ltd.


    Follow me on twitter - @philstewardson