Scotland may have rejected independence but London will have to get used to more real estate money moving into the UK’s regional markets.
Scotland may have rejected independence but London will have to get used to more real estate money moving into the UK’s regional markets.
Since the crisis, London has seen a flood of capital from all parts of the world targeting the full spectrum of its property market, from offices to retail, logistics, hotels and residential. But while London remains a magnet in Europe – and the UK – more recently, investors have started to move beyond the capital.
Indeed, according to research firm Real Capital Analytics (RCA), London registered a 1% drop in Q2 transaction volumes to €6.8 bn.
By contrast, investment flows in the UK as a whole rose 31% in the same period to €15 bn, led by cities such as Manchester and Newcastle-upon-Tyne. While secondary cities are drawing more attention across Europe and overall European real estate investment volumes are on the rise, the increase in regional investment was more pronounced in the UK, noted Simon Mallinson, RCA’s managing director for EMEA.
As domestic institutions become more confident about the prospects for commercial real estate in the low interest rate environment and amid signs that economic recovery is taking root in Europe, a number are now targeting secondary markets, he noted. ‘They expect to find better value there than in prime city markets.’
The full article on the UK appears in the October edition of PropertyEU Magazine. Subscribers can also download a PDF of the article here
