When Seth Godin said, ‘Find a niche, not a nation’, he could have been talking about commercial property investing! Niching your commercial property investing is one of the best ways to make higher than average profit from your commercial investing. And ‘scattergun’ investing can be dangerous as individual commercial property markets operate very differently from others – be they by sector, location or tenant type.

But why is niching so important? Well, I would argue that niching is important with all investments – to ensure that you invest both your time and your money in a highly strategic way. It is particularly important in the commercial property market, however, due to the sheer number of different types of commercial property available to invest in. If you think of commercial property as any type of real estate occupied by businesses, and then you consider how many different types of businesses operate in the UK today, you can see how commercial investing can be overwhelming if you don’t find a profitable niche that works for you.

Most corporate real estate businesses, such as REITS, property companies and pension funds, specialise in a small number of commercial sectors, meaning that they gain strength and knowledge in those sectors.

They approach their investing highly strategically – weighing up the returns, competition and supply and demand in those sectors, as well as the size of the opportunity, which should play to their strengths as a business. When I was a director at Land Sec in the mid 2000’s the business specialised in shopping centres and City of London offices – which provided an element of diversification but also meant that they niched narrowly enough so they could become market leaders at both.

There is no reason why SME investing should be any different - there is a reason why the very first session I have with my Board mentoring clients is ‘how to find your niche’. I have listed some key factors to take into consideration when considering which commercial niche to invest in: