Following last week’s news that commercial construction in the West Midlands has hit a 20 year high, property professionals are now predicting that the region is on course for a record year of commercial investment.
According to a new report by property consultancy Lambert Smith Hampton (LSH), the third quarter saw investment in the West Midlands’ commercial property sector climb to £600 million, almost doubling the figure from the same period in 2013.
This greatly contributed to the encouraging news that investment into the UK’s regional commercial property markets outstripped the total recorded in London for the first time since the start of 2011.
LSH head of office for the West Midlands, Adam Ramshaw, believes that the impressive performance of the West Midlands commercial property market could continue to build in momentum next year.
He says; “We are on course for a record year of transactions in our region, which continues to attract major inward investment. It will be interesting to see if the momentum continues well into 2015.”
The West Midlands was not the only region which performed well in the third quarter, however, as in the three months to the end of September overall investment into the UK commercial property market hit £16.3 billion. This marks a 37 per cent increase on the total garnered in the second quarter, and even more encouragingly a 41 per cent rise when compared to the third quarter of 2013.
Clearly, then, initiatives to encourage investment into regional markets are beginning to take root, with cities such as Manchester, Leeds and Birmingham becoming increasingly desirable locations.
This will hopefully go some way in allaying the fears of economic experts that a heavy focus on the London market is creating an economic recovery which is unbalanced and therefore unsustainable in the long term.
LSH chief executive officer Ezra Nahome believes that 2014 has marked the turning point in the commercial property market’s struggles which caused a lot of strain during the recession.
He says; “We continue to see high levels of competition among investors for UK commercial property, which looks set to enjoy a record year in terms of returns and investment volumes.
“Investment during the first three quarters of 2014 has already hit £39.1 billion and is on track to break through the £50 billion mark before the end of the year.
“That’s a significant milestone when you consider that annual investment inflows barely reached £30 billion as recently as 2012.”
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