Q3 property investment soars to £709m
INVESTMENT in the commercial property sector in the North West during the third quarter of 2015 reached £709m – more than double the previous quarter’s total.
New research by national commercial property consultancy Lambert Smith Hampton (LSH) reveals that across the UK, regional activity during Q3 exceeded that in London for the first time in 12 months.
LSH’s UK Investment Transactions (UKIT) report said key North West deals in the three-mont period included the acquisition of Houndshill Shopping Centre, Blackpool, by Frontier Properties for £105m, reflecting a net initial yield of 6.5%; Deutsche Asset and Wealth’s purchase of 2 St Peter’s Square, Manchester,for £100m; and LaSalle Investment Management’s acquisition of Snipe Retail Park for £62m, reflecting a net initial yield 6.75%.
There was a marked increase in activity across all asset classes but in particular, a significant improvement was seen within the office market where total investment volumes were up 135% on the previous quarter.
However, this was largely due to the sale of 2 St Peter’s Square. On a par with the office sector and boosted by the Houndshill Shopping Centre deal, the retail and leisure sector accounted for 32% of total investment activity with £226m worth of transactions.
The sale of Matrix Business Park for £51m saw investment volumes for the industrial sector reach £164m for the quarter, accounting for 23% of the total Q3 activity in the region and an increase of more than 100% compared with the second quarter.
Abid Jaffry, director and head of capital markets at LSH Manchester, said: “While UK institutions were the largest net investors into the North West commercial property market, accounting for 40% of total investment volumes in Q3, there has also been a notable rise in interest from overseas investors, which accounted for 38% of the total activity in the region.
“The figures for the North West commercial property market are very encouraging and we are seeing an increasingly bullish market with volume far outstripping that of competing markets. We will end 2015 on a high note and this can only improve as we go into 2016.”
The national picture saw investment in the UK commercial property sector during the third quarter of 2015 reach £12.8bn, according to the UKIT report.
Although this represents a 23% decline on the previous quarter – and is the third successive quarter in which volumes have fallen – investment for 2015 as a whole may just eclipse the record of £61.7bn set last year. Investment for the year to date currently stands at £48.5bn.
Ezra Nahome, chief executive of LSH, said: “London continues to perform strongly and will remain the most important market for overseas investors. However, it’s encouraging to see capital flowing back into the regions in a meaningful way as investors rebalance their portfolios in response to improving confidence and the price of assets in London.”
