Investment activity in property sector slumps
THE total amount of money invested in property deals in the North West plummeted by 93% in the second quarter of 2011 to just £118.9m, compared with almost £1.8bn in the first three months.
New figures from Lambert Smith Hampton (LSH) show that the fall was mainly due to the fact that the first quarter figures contained the £1.6bn sale of the Trafford Centre shopping complex by Peel to Capital Shopping Centres.
If this were stripped out, the decline in the value of deals completed falls to just under 40%.
Among the deals completed in the quarter include Kenyan-based Sameer Group’s acquisition of the Barclays call centre in Wavertree, Liverpool, for £10.45m, Orchard Orchard Street Investment Management’s purchase of Market Walk Shopping Centre in Chorley for £22.2m and Royal London buying two units at Eastgate Street in Chester for £12.35m.
Indeed, retail and leisure properties remained the most sought-after asset class in the region, accounting for around 54% of all completed sales.
Nick Davies, head of valuation at LSH Manchester, said: “Outside the South East the recovery remains slow although there are improvements in yields for food and retail warehousing in the North West and the regions.”
The firm also said that banks were now slowly beginning to release distressed assets onto the market.
Ezra Nahome, CEO of LSH, said: “Banks have been consistently reducing their exposure through consensual sales. We see this continuing. However, there was an uptick of receivership disposals in Q2 and we anticipate this will be an increasing occurrence over the next 12 months.”
“The banks have focused considerable resource at their loan book and given they have their ‘arms around the problem’ decisions are definitely being taken to sell.”
