Q3 leap in commercial property investments
THE total value of commercial property investment transactions across Yorkshire and the Humber increased by almost £200m in the third quarter of this year, according to new research.
Investment increased from £107.2m in the second quarter of the year to £306.5m for the period from July 1 to September 30, the Lambert Smith Hampton UK Investment Transactions (UKIT) report found.
However, the figure was below the £412m level seen in the third quarter of 2010.
Graham Foxton, surveyor in LSH’s Yorkshire investment team, said: “The deals mentioned above show that investors have an appetite for the right product and are willing to invest in our region when the opportunities are available.
“They continue to seek the security of long term income and prime properties in Yorkshire. The secondary market continues to be challenging as purchasers and lenders remain risk averse.
“London and the South East markets continued to be dominant in terms of total transactions however, this can but put down to the availability of good quality investment stock.”
LSH found the most significant deals to take place during the third quarter included Orion Capital Managers’ acquisition of a 50% stake in White Rose Office Park in Leeds for £130m, F&C REIT Asset Management’s acquisition of Cheapside Shopping Centre in Barnsley for £26m, and RREEF’s acquisition of Lateral, City Walk in Leeds for £24.3m.
Of the total value of transactions, UK Institutions committed £96.4m during the quarter, accounting for almost one third of the total activity, compared with 64% from the second quarter of 2011, the report said.
The industrial sector, which accounted for 57.5% of the total market in the second quarter, fell sharply to 1% and gave way to the office sector, which comprised 55% of the total market in the third quarter. Retail remained stable at 39%.
Focusing on the UK as a whole, investors bucked market sentiment in quarter three 2011 by transacting £8.06bn, 22% more than the previous quarter, in what is typically the quietest quarter of the year.
Ezra Nahome, chief executive of LSH, said: “Commercial property continues to provide attractive returns to investors in comparison to other asset classes and following the Bank of England’s second round of Quantitative Easing, which will support continued low finance costs and stimulate interest in the market, we could witness increased investment activity over the coming 12 months.”
