At the time of writing, much of the UK is experiencing another heatwave. As commercial property investors, I think we should be asking this question - how is this weather affecting my tenants’ businesses?

It might seem like an unusual question, but it’s one that can have a significant impact on the performance of your investments. A heatwave can be fantastic news for pubs and cafés with outdoor seating, garden centres, tourist attractions and holiday parks. At the very same time, it can present challenges for businesses that rely on people spending time indoors. Construction companies, for example, can see productivity fall during periods of extreme heat, whilst some retailers may experience reduced footfall as consumers head for beaches, parks or stay at home.

The weather is only one example, but it illustrates a much bigger point - commercial property has never been 100% about bricks and mortar. It’s always also been about understanding the businesses that occupy those buildings.

One of the biggest mistakes I see investors make is being completely focused on the property itself. They analyse the yield, lease, rental income, financing and the location. Whilst all of these are incredibly important, they often overlook one of the most critical questions of all: How resilient is the business that is paying my rent?

Ultimately, we don’t invest in buildings. We invest in income streams, and those income streams come from businesses. The best located and configured buildings attract the best businesses. If those businesses continue to grow and thrive, our investments are far more likely to perform well. If those businesses begin to struggle, the security of our rental income and, ultimately, the value of our investment can quickly come under pressure.