Research - 17/04/2014

UKIT Q1 2014: property investors turn to the regions

The Q1 edition of our Investment Transactions report reveals that investment in the UK commercial property sector during the first quarter of 2014 totalled £10.9bn - a 35% increase on the corresponding period last year and the third highest quarterly level since the start of 2007.

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Download the full UKIT Q1 report

Welcome back, regional Britain

The report also finds that the regional markets are receiving more attention from investors, as prime central London prices continue to rise. Investment in the regions more than doubled to £4.2bn, compared to £2.0bn during the first quarter of 2013, and now accounts for 39% of the total, against 25% in the corresponding period last year and 33% during the final quarter of 2013.

UK institutions become the largest net buyers

UK institutions were the largest net investors into the commercial property market, overtaking overseas buyers for the first time since the third quarter of 2011. Net overseas investment dropped to £1.2bn in Q1 2014, from £2.4bn in the corresponding period last year, on the back of an increase in asset sales.

Yields come in again

Transaction yields for commercial property have fallen once again and are now at their lowest level since the middle of 2008.  The recovery in values has led to profit taking in some sectors, but investors seem to be holding assets for longer than in previous upswings, particularly in London, so we may reach a point where activity will start to slow as a result of a lack of available stock. 

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