UK Regional Real Estate Investment Exceeds London Volumes
For the first time in a year, investment in UK regions during Q3 exceeded London volumes with the North East seeing a whopping 89% year-on-year increase in commercial property investments
According to new research published by commercial property consultancy Lambert Smith Hampton (LSH), a total of £184m was invested in commercial real estate in North East England in the third quarter of this year, demonstrating a real sign of confidence in the UK’s region.
British investors dominated activity in the UK, ploughing £63.67m into the region, where the retail sector fared best with £68.3m of investment – 37% of the total volume invested.
Substantial increase in the volume of investment
There was a significant increase in the number of deals carried out in Q3 than in the same period of 2014 – with 24 deals closing compared with 9 last year – although the average transaction size dropped to £7.65m compared with £10.77m.
LSH director Bill Lynn, who heads the Newcastle office, said: " The substantial increase in the volume of investment into the North East in the last quarter is clear evidence of the buoyancy and attractiveness of the region’s commercial property market ".
" We continue to see increasing investor confidence in the North East, particularly from UK investors, and we would expect this to continue into 2016 ".
Key deals for the quarter included Pradera UK’s acquisition of Hylton Riverside, an 11,241sqm retail warehouse in Sunderland, for £23.9m and Henderson Gravitas IV’s purchase of the Darlington retail space 3 to 7 High Row for £22.5m. Cobalt 12, a 9,197sqm office at Cobalt Business Park, also sold for £16.75m.
Across the UK, investment in the commercial property sector during the third quarter of 2015 reached £12.8bn, the research revealed. Despite representing a 23% decline on the previous quarter, investment for 2015 as a whole could just eclipse the record of £61.7bn set last year. Investment volumes in the UK for the year to date are currently at £48.5bn.
The latest edition of Lambert Smith Hampton’s UK Investment Transactions report also reveals that investment volume in the UK regions during Q3 exceeded London volumes for the first time in 12 months.
The firm said this helps to explain the reduction in the average lot size from £35m to £25m, and the fact that total transaction volume fell despite an 8% quarter-on-quarter rise in the number of deals.
Ezra Nahome, CEO of Lambert Smith Hampton, said: " We continue to see high levels of interest among investors for UK commercial property ".
" Although there are signs that the market is starting to return to more sustainable levels of activity, we’re seeing a considerable stock of properties under offer, on the market or being prepared for sale. This indicates a dynamic end to 2015 and a very real prospect that investment will hit a new annual record this year ".
The report shows that UK institutions were ne dis-investors in commercial property for the first time in Q3 since mid-2012, with a number of key institutions appearing to rebalance their portfolios by cashing in within London whilst continuing to invest outside of the capital.
Article by +Roxanne James on behalf of Propertyshowrooms.com
