How fledgling businesses could benefit from owning property

HSBC has found that 40 per cent of UK companies between six and 10 years old don’t own their own premises even though 70 per cent of owners agree that it would help their business to grow.

In a study of 3,400 firms, HSBC found very little difference between the number of new (two to five years old) and more established businesses (six to 10 years old) owning their own property.

“We estimate that 76,530 UK businesses will celebrate their fifth birthday in 2005 and while some owners are nervous about investing in commercial property, for a young business it can provide additional flexibility and lay the foundations for expansion,” says Ian Moore, HSBC’s head of commercial property.

“Businesses which are five years old are likely to have come through some hard times. Typically, they have a hard-won understanding of their market, a degree of trading security and robust and experienced management - they are ready to think about the next stage in their evolution and buying property can help.”

Owning commercial property can give owners greater control over their destiny - giving them access to capital that they might not otherwise have had, extra cash from sub-letting and the option to use the property as part of a retirement plan.