Reflecting the productive start to the year, the total number of deals was also 48% above the same period in 2017, albeit the average deal size fell from £9.8m to £8.4m.
Interest in Yorkshire’s industrial sector rebounded from the somewhat muted Q4 2017, with £121.6m worth of industrial deals in the first quarter, underpinned by Columbia Threadneedle’s purchase of the Network North portfolio for £41.9m, which included assets in Barnsley, Rotherham, Hull, Sherburn-in-Elmet and Castleford.
The real show stopper however, was the office sector which, at £103m, saw its second strongest quarter in two years. Deals included Mayfair Capital’s £37.2m acquisition of 6 Queen Street in Leeds on behalf of Swiss Life and M&G Real Estate’s purchase of 3 St Paul’s Place in Sheffield for £24m.
The theme of strong investment into alternative asset classes, which includes segments such as PRS, student accommodation and hotels and leisure, also continues unabated. With a volume of just under £100m, the sector was 44% above the same period in 2017, boosted by Grainger Plc’s £32m acquisition of Eccy Village in Sheffield, a PRS scheme which will comprise more than 230 homes.
Conversely, the once-dominant retail sector remains patchy, with just £87.3m worth of deals crossing the line in the first quarter. This is almost half the volume transacted in Q1 2017, reflecting high levels of investor caution.
At £45m, investment from UK private companies was relatively subdued in Q1, marking its worst quarterly performance in 15 months, and down 37% year-on-year. In contrast, UK institutions purchased their third highest volume in four years at £166m.
Luke Symonds, Capital Markets – Yorkshire, commented: “Yorkshire’s commercial property investment market has had a flying start to 2018, with volumes returning to pre-EU Referendum levels and the reappearance of several big ticket deals in the industrial and office sectors.
“It’s also really encouraging to see locations such as Sheffield, becoming a target location for PRS and student accommodation schemes. This will hopefully offset the ailing retail sector which, despite showing an improvement from Q4 2017, remains a volatile asset class as evidenced by UK stalwart ‘Toys R Us’ falling into liquidators’ hands.”
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