Assetz® News - Record breaking property investment in Yorkshire

Record breaking property investment in Yorkshire

27th April 2006 |

Yorkshire and Humberside has emerged as the outright leader in terms of growth in the value of property investment, with an astonishing rise of 116 per cent in 2005.

The latest report from Lambert Smith Hampton (LSH) indicates that investment deals worth more than £58 billion were completed in the UK last year, which suggests that investment levels have almost doubled in just two years.

Much of the UK appears to be enjoying a boom in terms of investment levels, with the south-west seeing an 81 per cent rise and the East Midlands not far behind at 74 per cent.

Investment in London and in the south-east grew by just less than 50 per cent and while this puts it some distance behind Yorkshire, it remains an impressive statistic.

The property market in general seems to have entered a period of buoyancy but commercial property investment even managed to perform well as the residential sector slumped last year.

Miles Youdan from LSH has pointed out that much of the money in Yorkshire has actually come from Ireland – an example of which is that Frenchgate Interchange that was sold to a Northern Irish investor for £250 million.

Predictably, retail saw most investment in 2005 and now accounts for around 62 per cent of all activity.

A three-fold rise in investment in shopping centres, for instance, saw £699 million in purchases throughout the year.

Despite increased interest from within the UK, the biggest investors in terms of net investment were from overseas, with £6 billion pumped into the UK market from abroad. Institutions, meanwhile, invested around £3 billion and LSH observes that these typically have a long-term strategy.

It has also been noted that UK debt-backed investors dominated the market and this reflects the confidence in the property market as a whole, with banks more than willing to lend to the sector.

David Watson, an investment agent at LSH's Sheffield branch, remarked: "Investment boomed in Yorkshire and Humberside in the latter half of 2005, with £1.2 billion of transactions. This contributed to a total activity of £1.9 billion for the year, more than double the previous peak level of £896 million recorded in 2004."

Mr Watson added that demand is likely to remain high throughout the year, although prices could be expected to stabilise in the closing months.

One particular factor to consider is the attraction of emerging European markets and Bulgaria is likely to draw many investors away from the UK in the coming years.

Referring to a 24 Chassa report, the Sofia Echo notes that hotels under construction have become particularly popular, where investors previously only paid attention to completed buildings.

Meanwhile, Sofia is soon to be home to Bulgaria's first Western-style shopping centre, with the Sofia News Agency indicating it will boast fashionable shops and a cinema complex.