Birmingham is becoming one of the most desirable locations in the UK for international businesses, causing a spike in demand for Grade A office, retail and industrial space. As a result, the Midlands branch of the Investment Property Forum (IPF) has revealed that the property investment market in the city is truly “back in the ascendancy”.
At a seminar held at CBRE’s new Birmingham offices, head of UK and Ireland Business at MSCI Real Estate (IPD) Phil Tily presented the latest findings by the leading provider of global real estate performance data which showed total returns for the UK commercial property market last year reached 17.9 per cent. This was the best result seen in the category for a decade, and Birmingham played a large part in this with the city’s commercial property market returns reaching 17.3 per cent for the year.
As a result, Birmingham climbed from 12th to 3rd place in the IPD annual survey, with only Brighton and Cambridge outperforming the West Midlands city in terms of commercial property returns.
Senior director of CBRE Global Investors, Tim Munn, was one of the speakers at the seminar and voiced his opinion on why Birmingham’s fortunes are escalating so rapidly.
He said; “Property investors are now favouring dominant regional centres and Birmingham is firmly on their radar.
“The infrastructure investment here and the strong manufacturing sector are a big part of the city’s attraction.”
The seminar also highlighted the growing prominence of other Midlands cities as investment destinations, with Leicester and Nottingham in the East Midlands both managing to secure places in the top 10. Placing 9th and 10th respectively, each saw commercial property returns grow to just under 15 per cent last year, indicating that further increases may be on the horizon as 2015 progresses.
In Birmingham, the stellar performers for returns were the retail and industrial markets. Surprisingly, the office market was somewhat behind as, although yields have come in, rents remain below the level achieved in the pre-recession peak – however, experts believe that this situation will change soon due to the rapid depletion of Grade A stock in prime business districts.
Seminar chair on behalf of IPF and managing director of Larkstoke Properties Ltd, Tim Hurdiss, remains optimistic about the UK’s commercial investment market as a whole.
He says; “It’s good to see that the commercial property market has shown really strong growth over the last 12 months, and that this news was delivered to a room full of the Midlands property community.
“We are extremely grateful to Phil and Tim for coming to Birmingham to give their presentations and to CBRE who hosted the event in their magnificent new offices.”
The picture shows (L-R) Tim Munn, senior director CBRE Global Investors, guest speaker Phil Tily, Head of UK & Ireland MSCI Real Estate-IPD and Tim Hurdiss, IPF Midlands board member/LarkstokeProperties.
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