Market snapshot

North East UKIT Q4 2017

Investment volumes across the North East reached their lowest level in five years during 2017, but the alternatives sector witnessed a record-breaking year.

Download the Q4 2017 UKIT Report

In this issue:

Lack of big ticket deals hampers volumes

Just £67.3m of property assets changed hands across the North East in Q4 2017, bringing the annual total for the year to £350m, down 48% on 2016.

This somewhat subdued figure was largely due to a downward trend in big-ticket investments across the region, with the average deal size falling from £15m in 2016 to just £8.14m in 2017, and only 10 transactions above £10m compared with 20 in 2016. 

The largest deal in Q4 being UK CPT’s purchase of the Maldron Hotel in Newcastle city centre for £33m.

Strong performance from industrial and alternatives sectors

2017 was a year of contrasting fortunes between the various property sectors. Insatiable demand for alternatives drove a record-breaking year for the sector, with a total of £181minvested smashing the previous high of £158m set in 2016 and accounting for a 52% share of volume.

The industrial sector also saw an uptick in activity, with over £50m invested during 2017 – more than double the previous year.

Meanwhile, investors remained averse to the traditional office and retail sectors, with another poor quarter in Q4 taking the annual volumes to £35m and £83m respectively, down 48% and 88% from 2016. 

UK quoted companies and private investors make emphatic return

Q4 also marked the emphatic return of UK quoted companies and private investors to the market, with investment surging to £64m and £71m in 2017, returned to a level similar to that witnessed in 2015.

However, notable by their absence were UK institutions and private companies who, at just £127m and £29m respectively, recorded their lowest levels of investment activity in over five years.

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Luke Symonds

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