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Edinburgh is top city outside of London in UK for commercial property investment
Edinburgh has topped a list of the most attractive British locations for commercial property investment outside of London, according to new research. Research amongst British property investors by the law firm Morton Fraser’s commercial real estate division ranks a list of 10 British cities according to their attractiveness as investment options. Edinburgh is ranked best with 52% naming it as an attractive option, followed by Bristol with 48%, Manchester with 40% and Leeds and Cardiff, both with 31% and then Glasgow with 30%. Birmingham is ranked next with 26%, Newcastle with 21%, Dundee with 17% and Aberdeen 16%. More investors found the top three attractive propositions than those who did not. However, the remaining seven cities did not appeal to the majority of investors, with more rating them an unattractive investment proposition rather than an appealing one. Aberdeen is rated the least attractive location for property investors and this is perhaps not surprising due to its energy dependent economy being hit by falling oil prices, leading to thousands of job losses and the contraction of the oil and gas industry. ‘The three ‘net positive’ cities in our league table have demonstrated real economic resilience since the recession. Their success in protecting inward investment, attracting business and talent, and developing infrastructure means property investors can more easily envisage long-term gains,’ said David Stewart, commercial real estate partner at Morton Fraser,. ‘Regional commercial property investment has a lower upfront capital cost but can often return higher yields and longer tenant leases, improving income security. However, those benefits are outweighed by perceived economic risks in most regional cities by potential investors,’ he added. According to Morton Fraser, Leeds, Cardiff and Glasgow will all expect to move into a net positive investment score in the coming year after at least 30% of investors felt they were attractive locations. They have also negotiated city region deals with the UK Government collectively worth at least £3 billion. ‘Demand for equity stakes in commercial property vehicles has increased in recent years as investors seek value and flexibility in the asset class. City region devolution will play a key role in ensuring investors see regional locations as positive income generating opportunities,’ Stewart explained. ‘That said, experience shows that a good property investment can withstand economic fluctuations and the right opportunities can be found in all these locations,’ he concluded. Continue reading
UK property supply down almost 5% in May
Residential property supply in the UK increased by 4.8% in May but a breakdown of the figures show that the number of homes for sale fell in half of the towns covered by the index. In total month on month supply was down in 50.4% of towns with the biggest falls coming in the towns of Southport and Loughborough at 28% and 24.1% respectively. The data from the index from online estate agent HouseSimple also shows that towns in the Midlands saw the biggest increase in supply with Lichfield up 56% and Chesterfield up 36%. The index, which tracks the number of new properties marketed every month in more than 100 major towns and cities across the UK and all London boroughs, also shows that of the areas that saw the biggest falls in supply some 47% were in the North of England. In London supply was also down by 2.4% overall in May with the City of Westminster seeing the biggest drop at 33%. The overall fall follows a decline of just 0.8% in April. The borough of Bexley also saw a significant fall following a huge peak in April, when new property listings were up 58.9%. However, despite the overall fall in London dome 53% of its 32 boroughs saw an increase in supply last month. Waltham Forest saw property supply rise 31% month on month following an 8% increase in April and Merton saw supply increase 30% in May following a 15% increase in April. ‘Although property supply was up in May, in large swathes of the country, the number of new properties listed fell,’ said the firm’s chief executive officer Alex Gosling. He believes that the confidence of buyers could be affected by the forthcoming referendum on the future of the UK in the European Union and predicts that in the run up to the poll on 23 June there could be a significant drop off in activity at a time when historically there is a lot of activity in the property market. ‘On the flip side, this could actually provide an opportunity for prospective buyers, who have their finance in place and can move fast, as they may be able to negotiate a good deal with motivated sellers keen to tie up a sale before 23 June,’ he added. Continue reading
House price growth slowing in Spain, but headline figures mask regional differences
Although generally the housing market in Spain is perceived as recovering well there are signs of growth slowing, according to some of the latest figures to be published. Residential prices grew by 1.3% in May and by 1.5% in the first five months of the year, but this is lower than the 1.9% registered up until the end of April. The data from the latest index property appraisers, Tinsa, also shows that the average price of a property in Spain is still down 41.4% since 2007. However, the national figures hide signs of real growth in some sectors and locations. For example, prices in capitals and large cities as well as in the Balearic and Canary Islands were up 3.5% year on year in May. On the Mediterranean Coast prices increased by 1.6% and metropolitan areas saw smaller annual growth at 0.7%. But in the rest of the municipalities category prices have been falling, down 2.5%. But even the breakdown of the figures shows there are signs of slowing growth. Since the beginning of 2016 average prices on the Mediterranean Coast remained at the same level as the beginning of the year but were up 1.3% in the capitals and large cities and the metropolitan areas. In the first five months of the year the rest of the municipalities category saw growth of 1.5%, and the Balearic and Canary Islands have seen the strongest price growth at 4.2%. Meanwhile, the latest asking price index from property portal Fotocasa shows that sellers reduced their price expectations by an average of 0.7% in April compared to a year ago. The average asking price in April was €1,624 per square meter, down by 0.2% month on month but overall the index has been stable for 12 months now with prices never varying more than 1% either up or down. Beatriz Toribio, head of research at Fotocasa, believes that house prices will continue to go in different directions during 2016. ‘Whilst in some areas of the country prices are stabilising or even rising, in others they continue to fall hard. This is a consequence of the crisis the sector has lived through, which has left a market of two or more speeds,’ she explained. Official figures released by the Government also suggest a slowing in recent months. It says that year on year prices have increased by 2.4% but by only 0.2% in the first quarter of 2016. A breakdown of the figures show that house prices rose the most in the Balearics with growth of 9.6%, followed by Catalonia up 4.9%, Madrid up 4.2%, Extremadura up 3.7%, Galicia up 2.6%, the Valencian region up 2.4%, and the Canaries also up 2.4%. Continue reading
