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North West investment market remains stable in Q2

Abid Jaffry

The total value of commercial property investment transactions across the North West fell in Q2 2012 to £142m from £243m in the previous quarter, according to our UK Investment Transaction (UKIT) quarterly bulletin.

Investment activity in Q2 similar to 2011 levels

Across the region, this represented a decrease of 42% from Q1 2012, but slightly above Q2 2011 levels of £119m.

Retail deals dominated Q2

The most significant deals to take place during Q2 included PRUPIM’s acquisition of Sainsbury’s at Marus Bridge Retail Park in Wigan for £39.2m, Standard Life Investments’ acquisition of Tesco’s superstore in Congleton for £21.2m and Commercial Estates Group’s acquisition of Stakehill Industrial and Distribution Park for £20m.

Retail sector accounted for 66% of total investment in the North West in Q2

Across the North West, the retail sector, which accounted for 65% of total investment in Q1 2012, increased marginally to 66% in Q2 2012 with £94m worth of transactions. The office sector, which accounted for 25% of the total market in Q1 2012, fell sharply to 9% in Q2 at £13m. The industrial sector accounted for 24% of the Q2 market at £34m, an increase of 48% compared to Q1 2012.

Continued lack of stock and transactions

Abid Jaffry, Northern Head of Capital Markets, commented: “The North West investment market remained relatively stable throughout the second quarter of 2012. However, there continues to be a lack of stock and there were no deals above £40m within the region. The majority of transactions have been sub £1m. There is still a great deal of caution within the market due to economic uncertainty and therefore stock levels are likely to remain thin”.

Investors focused on prime stock

Abid continued: “Investor demand remains focussed on prime stock, which is demonstrated by PRUPIM’s acquisition of a Sainsbury’s and Standard Life Investments’ acquisition of a Tesco superstore.”

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