Pictured above: Ezra Nahome
The first quarter of 2010 saw institutional investors make their
largest net commitment to the UK property market for more than
three years, reveals the latest research by national property
consultancy, Lambert Smith Hampton (LSH).
The quarterly UK Investment Transactions (UKIT) bulletin,
reports that during 2010 Q1, institutional net investment topped
£1.1bn, following on from £0.3bn in the final quarter
of 2009.
Ezra Nahome, CEO and Head of Capital Markets at LSH said: "In
what is a traditionally quiet period for UK institutional
investors, they have dominated buying activity, accounting for 42%
of the value of total purchases undertaken. This is the most
dominant buying position they have held on record."
The major source of stock being transacted has been from the
UK's private sector, where unquoted companies and private
individuals accounted for almost £2bn of sales.
Ezra commented: "We have been waiting for the banks to begin
releasing stock onto the market, and it looks like this process has
begun. Many of the sellers in the first quarter have been
highly geared property companies. Banks chose not to
foreclose on these loans in the bad times but have waited for a
recovery in values before looking for repayment."
Additionally, some investors have taken the opportunity of
rising values to crystallise profits.
In contrast to the institutions, overseas investors have
somewhat retreated from investment in UK commercial property, with
purchases at their lowest quarterly levels in over two years.
Reflecting this, overall value of investment transactions over the
first quarter in 2010 was £5.3bn, down by 31% from the final
quarter of 2009's recorded transaction value of
£7.4bn.
Regional overview
Investment activity across Nottinghamshire and Derbyshire
reached £80.5 during the first quarter of 2010, compared with
£32.5 during the last three months of 2009 - an increase of
147%.
Key transactions included Development Securities' purchase of
Pearl Assurance House in Nottingham for £9.1m, and Invista
REIM's acquisition of a Tesco store on Mansfield Road on behalf of
St James's Place Fund for £6.85m.
The largest transaction in the region was the Charities Property
Fund's purchase of a Tesco's Extra store in Mansfield for
£43m.
Julian Healey, Head of LSH Nottingham, said: "Nottinghamshire
and Derbyshire's commercial property investment market has got off
to a flying start in 2010, with activity levels reminiscent of
those pre-recession. However, the market continues to be
dominated by the Retail sector, which accounted for 85% of total
activity during the first three months of the year.
Healey continued: "While these signs of improvement are
encouraging, we mustn't get ahead of ourselves. With some
experts predicting a double dip recession in the run up to the
election, we are by no means out of the woods yet!
Looking ahead, LSH expects the recovery to remain slow but
steady. Ezra said: "The occupational market - a key driver of
investment - shows signs of improvement, but investor confidence
will remain at bay until the outcome of the election is known."
For more information on Lambert Smith Hampton, please visit
their website here: www.lsh.co.uk