Region’s investment volume highest in three years
A TOTAL of £301m was invested in commercial property across Yorkshire in the third quarter of the year, according to new research.
The UK Investment Transactions (UKIT) Q3 2013 report from Lambert Smith Hampton (LSH) shows that although this was almost 10% down on the previous quarter, it took the total for the year to date to £727m, a 21% increase compared with the same period in 2012 and the highest cumulative total since 2010.
For the first time in more than two years, the industrial and distribution sector was the region’s most heavily invested asset class, with transactions totalling £157m.
Boosted by Legal & General’s acquisition of two distribution units at Brookfields Park near Rotherham for £86.6m, the sector accounted for 52% of the region’s total investment activity.
Q3 2013 was also marked by a revival in demand for office buildings, with M&G Property Portfolio’s acquisition of Toronto Square in Leeds for £29m, contributing to a total investment of over £80m in the office sector.
Other key deals across the region included Blackstone Real Estate’s purchase of an industrial unit on Shepcote Lane in Sheffield for £26.4m and Helical Bar’s acquisition of Huddersfield Retail Park for £17m.
Despite the amount invested by UK institutions dropping by 31% in Q3, they were by far the biggest net investors into the Yorkshire market, buying over £135m of assets but selling less than £48m, which equates to a net investment of £87m.
Abid Jaffry, regional director of capital markets at LSH, said: “Activity levels across all main sectors in the market look very positive going forward. We have experienced considerable interest in assets we have marketed, to a point where we are now seeing highly competitive situations with a number of investors. This is beginning to drive pricing levels higher – a situation we have not seen on a consistent basis for some time.
“The volume of money in the market suggests that we will continue to see more transactional activity where pricing levels are beginning to exceed historic book values.”