The commercial property market divides into three main sectors: office, retail and industrial. Some sub-sectors also exist within the core sectors - for example, retail is often split between high street, shopping centres, and regional centres. The reason for grouping together properties used for similar activities is to identify those whose investment performance and management requirements are likely to be similar.
However, property markets are also structured by other factors, such as location. For example, property in London is different from property in rural Scotland, and within London there are many different, smaller office markets, such as the City and the West End. The economic factors that will drive investment performance, such as the cost and availability of land to develop, and the level of local employment, are complex. Like any investment, they require a level of expertise in order to understand and value them effectively.
Finally, while the variety of small commercial premises is limited, large-scale commercial properties, such as Piccadilly Circus or a regional shopping centre, are likely to be unique - and these unique factors will inevitably affect their investment performance.
The total value of the UK commercial property market was estimated at £496bn, and the value of UK residential property was estimated at £4,1265bn
In contrast, the total value of the equities market - as measured by the UK companies quoted on the London Stock Exchange - was valued at £1,288bn
Source: Paul Mitchell Real Estate Consultancy update of IPF report The Size and Structure of the UK Property Market; residential property is based on the estimate from National Statistic Blue Book, updated by Paul Mitchell and Real Estate Consultancy