Property market in good health says DTZ
COMMERCIAL property investment in the UK reached a record £54.9bn in 2014 with the UK regions becoming an increasingly attractive option for domestic and foreign investors.
Property consultancy DTZ’s ‘2015 Outlook’ presentation revealed that investment outside of London increased from £25.4bn in 2013 to £34.4bn in 2014.
The firm – which has an office in Manchester – says 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 on-going limited supply.
In Manchester city centre the firm expects around half of the 1 million sq ft of offices being built in will be pre-let or under offer by the end of this year. Among the speculative schemes under way are Mosley Street Ventures’ Two Two St Peter’s Square.
The regions’ share of the property investment market increased significantly from a 28% share of the total in 2013 to 36% in 2014, driven by significant surges in investment from the US, China and, in particular, Europe.
Ben Clarke, head of UK Research at the property firm, said: “DTZ has tracked an upward trend of new global capital targeting the UK for the year ahead, reaching £28bn in 2014.
“Inflows to retail funds also remain strong, so we expect downward yield momentum to continue into 2015, with secondary continuing to move in faster than prime.”
DTZ downplayed some perceived risks to UK property markets, including the impact of the General Election and volatility in energy prices.
A possible EU referendum may also lead to a significant pause in investment and occupier market activity in the lead up to any vote but this might not be for several years.
