The fourth annual “Who Owns Central Birmingham” report, from property consultants GVA, reveals that around £670 million worth of investment was pumped into the city’s office and retail markets during 2014.
The analysis, which focuses on over 1.5 million sq ft of commercial space in the heart of the city, also found that 71.4 per cent of office and retail assets are solely owned by UK investors – a slight rise on the 70.3 per cent recorded in 2013.
They also tended to play greater roles in major deals, with notable acquisitions highlighted in the report including the Great Western Arcade by CBRE Global Investors for £15.1 million and the House of Fraser building by Legal and General for £71.5 million.
Overseas ownership stands at 28.6 per cent, a fall of just over 1 per cent over the same period. However the mix of overseas investors has seen a significant change with a doubling of US ownership from 4.5 per cent to 8.5 per cent.
US investment in 2014 included the purchase of the Great Charles Street Estate by Dunedin with the backing of Angelo Gordon, and Lonestar’s acquisition of a 40 per cent stake in Brindletplace.
German investors were also active in the office market, with one of the most significant deals of the year concerning the acquisition of 5 St Phillips Place for £38 million by Cordea Savills on behalf of a German Institutional client. Other key properties in German institutional ownership include 2 St Phillips Place and One Snowhill.
On the other hand, the number of assets held by Irish investors fell steeply from 4.6 per cent to 2.9 per cent – perhaps as a result of improvements in their home market.
GVA’s regional senior director, Ian Stringer, believes that demand for space in the city centre will continue to grow in 2015.
He says; “Throughout 2014, we saw a strong demand for space in the city centre, primarily from UK property institutions and developers and US and German funds.
“These figures are a clear indication of the desirability of Birmingham city centre for both domestic and overseas investors, buoyed by significant and ongoing occupier confidence.”
Mr Stringer believes that ongoing developments will help to further fuel both domestic and overseas interest in Birmingham for some time to come.
“We expect this trend to continue as companies look to relocate from the increasingly competitive South East, with large-scale commercial projects such as Arena Central and Paradise helping to accommodate requirements for high quality office space,” he said
“Birmingham’s on-going infrastructure projects, such as the delivery of HS2 to the city in 2026, the extension to the Midland Metro tram, and the recently unveiled Snow Hill Masterplan will all go towards enhancing the desirability of this city and its position as a leading regional centre.”
