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News - 06/08/2013

Investment volumes soar across Yorkshire

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Investment volumes across Yorkshire soared during Q2 2013, reaching approximately £334m and representing an increase of 267% on Q1 2013, at £91m according to our latest research, UK Investment Transactions (UKIT) Q2 2013. 

A number of large deals took place in the region during the second quarter of 2013, including Legal & General’s purchase of The Light in Leeds for £91 million, the sale of Vanguard Shopping Park in York for £62.55m, Tritax Assets purchase of The Range in Doncaster for £37m and the £42 million sale of The Green student scheme in Bradford.

UK buyers rule the regions

The major investors in regional property were UK buyers – accounting for 89% of the quarterly total. In Yorkshire, the figure was just under 60%. Deals across Yorkshire recorded an average yield of 8.3% in Q2 2013 compared with Q1 2013 where this figure was closer to 12.1%

Trading for small to medium assets increases

This move towards the regions comes in conjunction with an increase in trading in small to medium assets. In Yorkshire, Q2 2013 saw double the number of deals for assets between £10m and £30m in Q2 in comparison with Q1 2013. The average deal size also rose from £7.6m in Q1 2013 to £20.9m Q2 2013, in contrast to the rest of the UK where the average deal size fell from £28m in Q1 2013 to £16m in Q2 2013.

Graph 1: Click here to view total number of deals across Yorkshire by price bracket 

Retail and Leisure sector continues to trade well

Continuing the theme set throughout 2012, the retail and leisure sector was once again Yorkshire’s most heavily invested-in asset class, with over £195m transacted in Q2 2013 compared with £73m in Q1 2013 – a trend which has continued for five consecutive quarters.

Change in fortune for office and industrial sectors

The region’s industrial sector also performed extremely well, with the total volume transacted reaching its highest level for two years to around £58m in Q2 2013, compared with £9.5m in Q1 2013.

The total office investment volume across Yorkshire also increased dramatically, with £38m transacted in Q2 2013 compared to £8m in Q1 2013.

Graph 2: Click here to view total volume invested across Yorkshire by sector (£m)
Abid Jaffry, Northern Head of Capital Markets at LSH, commented: “The regional investment market is currently dominated by UK investors who have been priced out of the Central London market and are seeking to take advantage of the greater value that can be achieved within the regions. There continues to be a large amount of competition for prime assets due to the lack of stock being brought to the market.  A significant proportion of the transactions were of considerable size which is indicative investor conditions across the North and highlights the groundswell of cash in the market at present.”

Click here to view our latest UKIT report in full.


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