Is the UK’s commercial property market looking over-stretched? There’s been plenty of coverage suggesting that London is fully valued but what about the regions?
At a recent property gathering, one regional lender specialising in developer finance scoffed at the idea that the UK as a whole was over-valued. He could still lend on high-quality developments in Manchester, for example, that offered superb returns, he said.
That view is supported by a report from law firm Nabarro’s real estate team, based on a series of interview with investors and commercial property owners. Well over 80% of respondents told Nabarro that appetite to invest in and develop regional property will increase over both the next two and five years, while every respondent believed there would be either the same or more funding for developments over the next two years in the regions, and 92% believed that would be true over the next five years as well.
As far as preferred locations were concerned, Manchester came top with 73% singling it out as their top pick, while 42% chose Birmingham, 27% picked Bristol and 22% named Leeds. The survey also showed very strong appetite for developing and investing in “alternative” real estate assets such as data centres, healthcare, hotels, private rented housing, retirement properties and student accommodation, with 41% picking alternatives as the most appealing development propositions and 34% naming them as their top investment choice.
