UK regions stable, London stabilising, says Savills

While the London real estate has seen the biggest value correction since the 1990s, the rest of the UK market has been 'pretty stable', Mark Ridley, the newly appointed CEO of UK commercial property at Savills said in an interview with PropertyEU at MIPIM.

'Supply and demand are well balanced in regional economies, and they’re not as dependent on the office market. You simply don’t get the same dramatic highs and lows as you do in London,' he said.

Large investors generally look to invest in trophy assets in major cities, like London, but they will pick up solid properties outside the capital, he said. 'Something they will look at is high-quality shopping centres in places like Glasgow, Birmingham, Manchester and Liverpool and the south-west. They generally have healthy local economies and a good labour pool,' Ridley said.

The UK market outside London is expected to see a drop in investment volumes of around 25% this year, quite a bit lower than the 40% dip some are projecting for London.

'But the number of sales in London has largely dried as some sellers have now reached their required liquidity levels,' he said. 'So even the London market is becoming more stable. If the current price stability continues we could see a resumption of sales at higher levels. Right now there are more buyers than sellers, which can only be a good thing.'