var _gaq = _gaq || []; _gaq.push(['_setAccount', 'UA-41362908-1']); _gaq.push(['_trackPageview']); (function() { var ga = document.createElement('script'); ga.type = 'text/javascript'; ga.async = true; ga.src = ('https:' == document.location.protocol ? 'https://' : 'http://') + 'stats.g.doubleclick.net/dc.js'; var s = document.getElementsByTagName('script')[0]; s.parentNode.insertBefore(ga, s); })();
Home / Latest News / Some signs of encouragement for the Welsh property investment market

Some signs of encouragement for the Welsh property investment market

Something is happening in the property investment market.

There has been a doubling in the number of property investment transactions UK-wide in April compared with figures for January, February and March and a similar increase in the capital value of transactions.

This is at a time when better economic news is beginning to filter through, when the residential and buy-to-let markets are seeing an upturn and after a consolidated increase in recent weeks in the stock market.

It seems many factors are coming together at the same time. It is partly explained by major UK property investors finding it difficult to achieve value in London at the high prices being paid by overseas investors. The result is that investment is being made outside London.

After the very flat market since August 2007, one is naturally going to be cautious in predicting an upturn, but this is nevertheless encouraging news. It seems that this investment is being and will be directed towards the major provincial cities but also other affluent towns and cities. Cardiff has suffered from an increased focus on the south-east of Enlgand over the past few years and has been perceived to be on the fringe of investor’s preferences.

The focus is likely to be on other centres and it may take a while for demand to increase for Cardiff, although we will have to wait and see.

However, there has been a recent major city-centre investment on Queen Street by NFU Mutual where they have purchased the River Island, Top Shop Zara block for £45.5m, a yield of 5.66%. We must bear in mind that Wales has attracted only a very small percentage of the total capital value of UK commercial property investment transactions over recent years, only around 1%.

The extent to which there is a market upturn now, which would be good news for everyone, can probably only be judged better over the next two to three months when we can see whether the upturn in the capital value of commercial property investment transactions for the UK continues.

It will probably take quite a bit longer to be able to judge whether there is any upturn for the surrounding region is my hunch.

It might happen faster but I doubt it. A recovery will probably be a “slow burner” after such a recessionary, and then flat, market for such a long time.

I chaired an investment panel meeting of 26 firms within the property agents independent group in London recently and generally the feeling was that an upturn is beginning to happen including some improvement in tenant demand in the different property sectors, although less so for offices at this point.

Generally speaking, any upturn may not be based on all the property fundamentals being right, but on “money transfer preferences” to the provinces. A perceived increase in value may well underlie investors’ wishes to buy now, which would go some way towards explaining the increase in the number of transactions.

This is good news with some very attractive returns in the commercial property sector now. I have been one of the more pessimistic advisers in the property investment market over recent years. Let’s not get too carried away yet would be my advice…

 

Peter Graham, is managing director of Stephenson Alexander. He has been a specialist in property investment since 1987 working in the Welsh investment market and also focusing on investors active between London and Cardiff

 

It may be a while before Cardiff begins to benefit from the greater interest in property outside of London

SOMETHING is happening in the property investment market.

There has been a doubling in the number of property investment transactions UK-wide in April compared with figures for January, February and March and a similar increase in the capital value of transactions.

This is at a time when better economic news is beginning to filter through, when the residential and buy-to-let markets are seeing an upturn and after a consolidated increase in recent weeks in the stock market.

It seems many factors are coming together at the same time. It is partly explained by major UK property investors finding it difficult to achieve value in London at the high prices being paid by overseas investors. The result is that investment is being made outside London.

After the very flat market since August 2007, one is naturally going to be cautious in predicting an upturn, but this is nevertheless encouraging news. It seems that this investment is being and will be directed towards the major provincial cities but also other affluent towns and cities. Cardiff has suffered from an increased focus on the south-east of Enlgand over the past few years and has been perceived to be on the fringe of investor’s preferences.

The focus is likely to be on other centres and it may take a while for demand to increase for Cardiff, although we will have to wait and see.

However, there has been a recent major city-centre investment on Queen Street by NFU Mutual where they have purchased the River Island, Top Shop Zara block for £45.5m, a yield of 5.66%. We must bear in mind that Wales has attracted only a very small percentage of the total capital value of UK commercial property investment transactions over recent years, only around 1%.

The extent to which there is a market upturn now, which would be good news for everyone, can probably only be judged better over the next two to three months when we can see whether the upturn in the capital value of commercial property investment transactions for the UK continues.

It will probably take quite a bit longer to be able to judge whether there is any upturn for the surrounding region is my hunch.

It might happen faster but I doubt it. A recovery will probably be a “slow burner” after such a recessionary, and then flat, market for such a long time.

I chaired an investment panel meeting of 26 firms within the property agents independent group in London recently and generally the feeling was that an upturn is beginning to happen including some improvement in tenant demand in the different property sectors, although less so for offices at this point.

Generally speaking, any upturn may not be based on all the property fundamentals being right, but on “money transfer preferences” to the provinces. A perceived increase in value may well underlie investors’ wishes to buy now, which would go some way towards explaining the increase in the number of transactions.

This is good news with some very attractive returns in the commercial property sector now. I have been one of the more pessimistic advisers in the property investment market over recent years. Let’s not get too carried away yet would be my advice…

Peter Graham is managing director of Stephenson Alexander. He has been a specialist in property investment since 1987 working in the Welsh investment market and also focusing on investors active between London and Cardiff           

Check Also

UCAS

A level results in Cardiff: How every school performed

Thousands of pupils across Cardiff have celebrated their A level results today. Across the city …