NW capital values on the rise

NORTH West commercial property capital values will rise across all sectors in 2010, according to BNP Paribas Real Estate’s latest forecast.

In line with BNP Paribas’ national forecast, retail will see the greatest increase in capital values of 8.2% across the region in 2010, it predicted at its annual economic seminar, held at the Bridgewater Hall on Friday.

Meanwhile, the industrial and office markets will have more modest levels of recovery with increases of 5.8% and 3.8% respectively.

Keith Steventon, head of research, said: “Our forecasts indicate that the UK investment market is not a bubble but instead a sustained recovery. There is enough money floating around to ensure that all prime property types are likely to gain value in the coming years. 

“We may even see yet higher gains in capital values in 2010 than we’ve already indicated – if there continues to be a shortage of prime assets available to satisfy the huge weight of demand from both UK institutional and overseas investors.”

The forecasts also look at rental growth, and for the North West it is predicted that offices will see minimal falls in rental growth this coming year (0.4%) before growth resumes in 2011. 

The national retail market remains weak and the North West will see a fall in rental growth this year before seeing recovery next year with a modest increase of 0.3%, it said.  Rental growth in the industrial sector will also continue to fall this year but it is expected to see an increase of 3% in 2012.

Mr Steventon said: “Now is certainly a good time for occupiers to move and investors to asset manage in order to gain even more value for their buildings in a rising market.”

Andrew Hamilton, senior director of BNP Paribas Real Estate’s Manchester office, added: “The most important element coming out of this latest research are the positive predictions in relation to the return to rental growth in the medium term. 

“A sustained recovery needs to be built upon the strong property fundamentals of occupier demand, rental growth, asset management opportunities and the development of new prime stock, as opposed to yield compression driven by the sheer weight of money.”

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