Brexit has created a favourable regional property investment market, Hillview Real Estate (HRE) said today as it announced the acquisition of an eight-asset office portfolio in northern England.
The property division of The Hillview Group (THG) has bought the Lawnswood Business Park in Leeds for £26.5m (€29.3m). The portfolio is currently let to 17 tenants.
The acquisition was funded by ICG-Longbow, under a senior debt facility.
HRE said the acquisition comes as the company has “identified a post-Brexit pricing dislocation in UK regional markets across office and industrial properties”.
“The market shifts have been driven by a general perception of uncertainty in the UK economy, suppressing value in high-quality regional property,” it said.
According to a report by Capital Economics, under a no-deal Brexit, commercial real estate values in the UK are likely to fall by between 5% and 9% over two years.
Nadav Livni, a managing director of The Hillview Group said: “While Brexit may be creating significant political uncertainty, the hesitancy from European and foreign investors offers opportunities for UK investors with a long-term perspective to established high-quality and diverse regional portfolios.”
Following Brexit there is an opportunity for the government to massively boost the UK economy by investing in regional areas and this will benefit the regional office and industrial property sectors, Livni said.
“Having such a strong talent pool, infrastructure, access to capital and leading-edge innovation, I am hugely optimistic about the long-term prospects of the UK as a global hub of high-value manufacturing industries and services.”
In the past two years THG has expanded its investment activities via acquisitions, despite the unclear outcome of the Brexit negotiations.
Next year, the manager expects to launch its third Hillview Partners Property Fund.
Bradley Pearlman, a partner at THG, said: “THG has established its reputation with investors over the last decade. Based on the strong interest from investors, we are making plans to launch Hillview Partners Property Fund III”