BUSINESS LIFE: COMMERCIAL property: Commercial property becoming a safe bet; FOCUS ON RUGBY.

INVESTMENT in commercial property is fast becoming a serious contender for private investors who don't want to get their fingers burnt on the fluctuating stock market, according to personal tax experts at KPMG.

With the current condition of the stock market not providing the returns that many investors hoped for, private investors are looking to invest elsewhere.

Narinder Paul, tax partner at KPMG in Birmingham, said: "With performance on the stock markets down, investors are looking at alternative ways to receive return on their funds. Commercial property is certainly an area of focus and interest."

There are a number of ways for an individual to invest in property, with the most popular taking the form of a Limited Liability Partnership, a company or personally. Which approach adopted depends upon the circumstances of the individual.

Narinder Paul said: "Each approach offers different benefits to the private investor. For example, individuals who want to ensure they have a limited liability should opt for either a limited liability partnership approach or establish a company in order to purchase the property.

"A limited liability partnership will also reap the benefits of a lighter tax burden on the eventual sale of the property, as will a personal purchase. "The tax liability on the sale of a commercial property let to an unquoted trading company is particularly low."

With private investors entering the market, property advisers are seeing a significant upturn but investors should not overestimate the amount of stock available.

Jonathan Hillcox, investment partner at international property advisers, GVA Grimley, said: "It is certainly true that competition is greater now than for some considerable time. You won't find a long list of available properties waiting for an individual investor.

"However, there are always opportunities out there, providing you know where to look. If we are confident that the investor is serious, we will seek out suitable investments through our market knowledge and contacts.

"For example we might approach a freeholder 'cold' and offer to buy their building through a sale and leaseback. We make it our business to get to know the private investors and look for opportunities to suit them."