According to property experts the investment into UK commercial property could reach the £50 billion barrier in 2014. In 2013 the total for Commercial investment reached £45 billion, which was nearly a 50% increase on the previous year and the highest level since pre-recession figures. This is welcome news for commercial property agents such as Prideview Properties as we can focus on expanding our portfolio of properties on offer and look forward to serving new customers.
Property consultants Lambert Smith Hampton (LSH) released figures based on a new analysis during an event at the company’s offices in Birmingham. According to LSH’s investment trends report, London remains the primary area for
According to the Financial Times, all types of property are doing well in terms of new investment including office space, industrial units and commercial property. Some recent large gains for the property market are unsurprisingly based in London: British Land announced last week they had found an occupant for the 30th floor of the Leadenhead Building in the city. However, although office space is being snapped up in Central London, gains are being made further into the regions due to greater yields and more competitive pricing. A good example of retail units selling for a high return price is IQ Winnersh business park in Reading by Oaktree Capital Management for £245m.
The rise in commercial property investments is not just happening in London, but significant gains have been made in other parts of the country. BNP Paribas believes that the investment boom will occur in two phases: the first phase will be a rise in purchasing prime location offices in the Thames valley and South East England and the second wave of investment, which is currently gaining momentum, will affect retail and warehouses in the largest regional cities. Evidence of this can be seen in Birmingham where commercial units such as No. 1 Snowhill sold to Union Investment Management and Mell Square Solihull which sold to IM Properties.
The increase in UK commercial property is due to the strengthening UK economy which leads to higher GDP and greater investor confidence. Many large overseas companies are attracted to British property because of long leases, generous unit space and the strength of their exchange rate against the pound. Even for domestic companies, commercial properties are attractively priced and the expected annual return for the next three years is 8.2%.
These figures are positive and encouraging both for property consultants and investors alike as more buyers seek the opportunities provided by the current climate.