The commercial property sector in the North of England showed strong growth in the second quarter of 2018, new figures have revealed.
This marks a continuing trend whereby investors are looking to regional centres for better returns, with observers attributing this to the lower cost of doing business outside of the South East, a strong talent pool and substantial opportunities for growth.
According to a recent commercial property report released by global real estate services provider Savills, commercial properties in a range of towns in the North West of England, including Stockport, Crewe, Macclesfield and Warrington have been shown to have rental yields that far exceed the national average of 4.5%.
However, the region seen to be performing exceptionally well is Yorkshire, with commercial property valued at over £500 million changing hands in the area in the second quarter of 2018. Yorkshire’s regional market is observed to be growing at a faster rate than other markets in the broader ‘Northern Powerhouse’, with the £523 million worth of commercial property assets sold in Q2 representing the highest total for almost three years, an increase of 32% year-on-year.
The figures released by leading UK market-focused commercial property and real estate consultancy firm Lambert Smith Hampton showed that Yorkshire’s figures compared favourably with an uplift of 7% over the same 12-month period across Yorkshire, the North West and North East combined.
The office market was shown to be in particularly good health, accounting for 45% of commercial property transactions. Total investment in this sector reached £235 million, more than double the figure in the previous quarter.
Another sector performing well is the industrial sector, representing 21% of total investment volume for the quarter at a total of £109 million. The alternatives and retail sectors performed in line with figures for Q1, making up 19% and 15% of the total commercial property investments made. Yorkshire was shown to be an attractive investment for UK Institutions, with buyers from this category being responsible for 43% of the total activity.
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