Overseas interest driving Manchester property market
FIRST quarter property investment in Manchester has already outstripped total volumes for 2012, according to figures from Jones Lang LaSalle.
That was down to the acquisition of the Co-op’s One Angel Square, but the data suggests that this year will be the strongest yet in terms of foreign investment.
In 2012 JLL recorded £128m of direct investment, while in the first quarter of this year the Co-operative’s sale of One Angel Square was sold to RREEF and Gingko Tree for £142m.
With last month’s £16.25m sale of the 50,000 sq ft Bauhaus office block to Orchard Street and a deal at 100 Barbirolli Square expected to complete early in the third quarter, JLL believes the city could pass the £200m mark.
Foreign investors are on course to outstrip domestic purchasers in Manchester, as they did in 2012 with £102m against £26m from UK investors. Despite the strong start to this year, JLL suggests that Manchester may not beat the 2011 total of £290m, citing a lack of supply of quality office stock following a string of major transactions.
James Porteous, director at JLL’s capital markets team, said: “Since January Manchester’s market has really turned a corner following what was a much flatter year in 2012 than many had expected after a relatively strong 2011.
“As London’s market has become more and more competitive, investors chasing reasonable returns are increasingly looking to Manchester, with its strong and stable occupier market, as a safe bet.
“In the major deals we have led this year, including Bauhaus, the competition has already intensified with multiple bids driving final deals above initial asking prices. However, with fewer assets likely to be available in the second half of 2013 it’s likely that we’ll see the volume of transactions begin to run out of steam.”
