North West real estate market sees £1.32 billion of transactions

The North West real estate market has seen a significant improvement in the first half of 2014 with over £1.32 billion worth of transactions completed, according to Deloitte.

Research from Deloitte’s North West Property Investment Monitor (PIM) shows that investment into the regions real estate is at a three year high.

This upward trend is expected to continue in the short to medium term supported by strong demand for real estate across a number of key sectors.

The volume of transactions completed in the first six months of 2014 represents a 222% increase compared to the corresponding period in 2013.

The largest single transaction recorded so far this year is M&G Real Estate’s £320 million purchase of the Royal Bank of Scotlands’ Spinningfields buildings, which accounts for over 24% of the total transactions completed in the first two quarters.

The office market has been the most active sector to date in 2014, with c.£690 million transacted in the first six months of the year, followed by retail & leisure (c.£390 million) and industrial (c.£240 million).

In 2013 the average lot size transacted was £7.6 million. During the first half of 2014, the average lot size increased by 58% to £12 million demonstrating an improved appetite for exposure to North West real estate.

The most active purchasers of North West property so far this year have been UK institutions and managed funds, which combined, account for almost three quarters of the total volume of transactions recorded.

“Deloitte also highlight the improvement in corporate attitude over the past 6-12 months as integral to the improvement in the regional property landscape, with many businesses now significantly more optimistic about their growth strategies than in recent years, despite uncertainties over interest rate rises and a possible EU referendum.

Callum Robertson, Director in Deloitte’s Investment team says: ‘Appetite for exposure to North West real estate has strengthened considerably over the past 12 months. This is driven by investors seeking to capitalise on more attractive returns and a strengthening occupier market’.