brick and mortar-investment

Brick & Mortar – The Safest of Investments

  • 25.October 2015
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brick and mortar-investmentIt is not uncommon to hear the term brick & mortar, wondering where this originated from. A brick is a brick, one of the simplest forms of building components. Mortar is used to hold building materials together, namely bricks and stone and it is composed of water, sand and cement. As a saying, brick & mortar very simply refers to buildings and constructions, however this is more commonly used when referring to the common shop. Having said that, nowadays we can easily identify that this also refers to any form of business or company which has a base in an actual shop, store, or office rather than simply being an online entity.

Looking at brick & mortar from the real estate investment aspect, it is used to refer to any kind of commercial establishment starting from a small corner shop through to a storage warehouse and beyond to an entire multi-storey shopping complex or  industrial premises.

Where investment is concerned, brick & mortar investment remains one of the steadiest and most prolific ways in which one can invest one’s money. One might well argue that with the increased popularity of online shopping, brick & mortar establishments are now a thing of the past. However, for all the availability of online shopping and the ensuing trade there-from, it is indisputably true that people in general still flock to shopping malls in their thousands, excited by the stability of actually seeing and touching the merchandise they are about to purchase.

Interestingly enough a study carried out by a US-based management consulting firm (A.T.Kearney Omnichannel Shopping Preferences Study) issued in July 2014, proves just that. After having surveyed 2500 shoppers of different ages and demographic groups, it transpired that 90 % of them preferred to sho_D701655SliemaSp in an actual store, lauding also the social aspects of the experience. As one notices that 94% of all retail sales happen in brick & mortar shops, the argument that investing in commercial establishments is overshadowed by digital trade, does take some re-consideration.

This is certainly food for thought which should continue to strengthen the purpose of anyone who wishes to invest in a retail or consumer oriented establishment. RE/MAX Malta has of hundreds of properties listed under the commercial real estate section which includes offices and office spaces, restaurants, shops and warehouses, Buying up a real estate building that can house a retail activity, does pay dividends in the long run.  Keep in mind that commercial properties are valued in a different way from residential properties, with the price being upped by the actual space of the property, eg. the square metres in the case of a shop floor or warehouse space.  Prices are also dependable on the location of the premises since a commercial space which sees a great deal of foot traffic or which offers ample parking space, will be more valuable and appreciable.

Valletta Market An interesting investment option would be to purchase a commercial property with tenants and their relative leases, up and running and securely in place. This will definitely be a head-start for the new investor who will not need to hunt around for  tenants/lessees. Most commercial real estate could require minimal interventions and expenditure to begin with since most of the required major changes are shouldered by the tenants/lessees. There are permits and taxes to consider, linked directly to the fact that the premises are being leased or rented out on a commercial basis, but these can be clearly identified and explained by a Re/max agent experienced and specialised in the diverse aspects of the commercial sector.

For more information go to our Commercial Real Estate Page

Browse here for more information about Living and Investing in Malta for Expats

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