By Simon Parsons
Berrys
AS we rapidly approach the end of Q3 and our clients prepare for Q4, we try and assess market behaviour and where opportunities will or may present themselves. Reading national investment reports for Q2 2017, there has been continued growth in the industrial/warehouse market with Q2 reflecting £1.9bn, up 40 per cent on the five-yearly average.
Average prices have remain remarkably stable over the last 12 months and the election earlier this year appears to have had little effect on both activity and market pricing. This positive stability to the All Property Average will most likely see an increase in supply to the market in Q4, as traders seek to maximise profits.
In the regions, single asset deals were up 10 per cent on the previous quarter, albeit down on the five-year quarterly average. There is little doubt this was partly due to the political environment experienced in this quarter and we feel that assuming stability ensues the regional market will continue to grow.
Whilst the national office market reflects little activity compared to that of the industrial sector, growth expectations for the regional office market, are looking positive as yield expectations reflect a hardened position. With little evidence of significant office development outside London, it is likely that we will experience stronger demand both from investors and occupiers through the final quarter of 2017 and early 2018.
Investment from the Far East amounted to £2.4bn into UK real estate in the second quarter of 2017. In the regions we are experiencing evidence of Chinese investors looking at both residential and commercial stock. The comparison of the investment return required by these overseas investors to that of the local and regional investor market, is placing pressure on initial yields resulting higher prices.
Berrys Investment Agency team have been working closely with developers and investors to ensure our clients obtain long term income from commercial assets. On behalf of corporate client, we are currently purchasing two light industrial units which provide high specification industrial/office accommodation and diversification from other forms of income. This investment provides long term opportunity to grow returns and future acquisitions into commercial investment.
We work with and act on behalf a range of diverse investors who are actively seeking to forward finance development projects or forward sale opportunities. If you own commercial or residential property investments and would like to understand the market value of your asset, or indeed would like to present your asset to the market, contact Simon Parsons, BSc (Hons) MRICS in confidence on 01536 213169.
