Wednesday, February 4, 2015

News: Record quarter for Yorkshire investment market

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Investment in the Yorkshire commercial property sector totalled £571m in the final quarter of 2014 – a 61% increase on the previous quarter and the highest quarterly performance on record - according to new research published by Lambert Smith Hampton.

The commercial property consultancy tracks the region's deals in its UK Investment Transactions report which showed that investment for the year as a whole was £1.58 billion, which is up 72% on the total volume of deals for 2013. It is also the highest annual total investment for Yorkshire since before 2007.

In addition, the report reveals that investment in the UK regions increased by 41% to £21.1 billion for the year as a whole – the second highest figure on record. LSH said that is the primarily the result of the resurgence of UK institutional investors – which increased inflows by almost 30% in 2014 – buoyed by improving economic sentiment outside of London.

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Fellow property services company, DTZ recently gave its outlook on the UK property market, stating that the UK regions have been an attractive option, given the higher yields on offer than in London, and with occupier markets underpinned by increasing demand and ongoing limited supply, DTZ also observed a dramatic increase of the flows into domestic retail funds during the second half of 2013 and over 2014, boosting institutional demand.

Major commercial property deals in Rotherham during the final quarter of 2014 include the HQ of electronic retailers Maplin being bought by investors, the second such transaction in little over a year. The £15.1m deal was the first by a new UK commercial property joint venture formed by Oxenwood Real Estate and Catalina Holdings, a Bermuda-based reinsurance investment company.

Also in the borough, X-Cel Superturn, a global manufacturer of machined components, bought a 30,000 sq ft industrial unit on the Advanced Manufacturing Park (AMP) for £2.75m; St Paul's Developments sold the last remaining unit at Brookfields Park to the British Red Cross; and manufacturing success story, Pyronix, continued its expansion by acquiring Interchange Industrial Estate at Hellaby from St Modwen.

At Allsops final auction of 2014, the 4,204 sq ft unit in All Saints' Square, currently underlet to Scrivens opticians, sold for £800,000.

Abid Jaffry, director and regional head of Capital Markets at LSH, said: "The commercial property investment market enjoyed an outstanding year in 2014 with the highest total investment in Yorkshire since pre 2007. We expect the momentum to continue into 2015 as more investors focus on the regions although this may be focused on good quality secondary assets.

"While the headline numbers may invite comparisons with the last boom, there is an important difference this time: investors are now considerably less reliant on debt finance. As a result, our forecasts point to transaction volumes returning closer to trend levels in 2015. The uncertainties surrounding the forthcoming General Election may also serve to dampen activity."

LSH website

Images: LSH

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