Due to a shortage of available prime stock in Central London, international commercial real estate investors are increasingly attracted to UK regional cities, and in particular major investment opportunities, according to global property advisor CBRE. properties qatar
In the first quarter of 2014, the UK registered €12.4 billion in transactions, up 5% from the previous quarter. Outside of Central London, nearly three-quarters (74%) of the total was made up of properties, up from 61 percent in the previous quarter and the highest proportion since Q4 2011.
In Q1 2014, international investors transacted for €1.2 billion (£1 billion) outside of Central London, with nine transactions from Asian and Middle Eastern investors, five of which were worth more than €12 million (£10 million). Since the market bottom in Q2 2009, non-European capital has gradually expanded into regional UK cities, more than doubling market share from 7% to 18% in Q1 2014.
Non-Central London investment peaked in Q1 2009, accounting for 83 percent of total UK investment. If this amount represents the possible upside, the rest of the UK will see a substantial increase in investment in 2014.
Jonathan Hull, CBRE's Managing Director of EMEA Capital Markets, said, "At the end of last year, London was the focus of a slew of cross-regional investment, with buyers from Asia and the Middle East eager to snap up prime real estate in one of the world's most important cities. Due to the intense competition, there is a scarcity of available stock in Central London; as a result, investors are looking to the UK's major regional cities, such as Edinburgh and Manchester. This can be seen in the recent surge in regional office expenditure in the United Kingdom, as well as the resulting yield compression."
Overall, the European commercial real estate investment sector had a good start to the year, with €38.9 billion in Q1 2014, up 21% from Q1 2013. This is the highest number for the first quarter since 2008.
However, after a particularly strong fourth quarter of 2013, the figure for the first quarter of 2014 was significantly lower than the previous quarter's €62.4 billion. The top four European commercial real estate investment markets account for nearly three-quarters of the total market: the United Kingdom (32 percent), Germany (25 percent), France (9 percent), and Sweden (9 percent) (7 percent ).
In Q1 2014, investment activity increased year over year in Spain, Ireland, and Italy, as investors continue their ascent up the risk curve. Spain has clawed its way back, with a turnover of €988 million and a growing share of the European investment market (3 percent ). With €939 million, Ireland (2%) achieved its highest quarterly total since 2006.