Re­gion’s com­mer­cial prop­erty sec­tor sees a slow­down in in­vest­ment.

In­vestors are de­lay­ing de­ci­sions ahead of Brexit

Yorkshire Post - Business - - NEWS / BUSINESS - Lizzie Mur­phy BUSI­NESS RE­PORTER @lizziec­mur­phy

In­vest­ment in York­shire’s com­mer­cial prop­erty slowed down in the third quar­ter of the year as the num­ber of avail­able ware­houses de­creased and in­vestors started to de­lay de­ci­sions ahead of Brexit.

From July to Sep­tem­ber, in­vestors paid £583m for prop­er­ties in the re­gion com­pared to £622.8m the same pe­riod the year be­fore, ac­cord­ing to data from proptech plat­form Datscha.

Leeds was top of the league ta­ble in York­shire with £193m of in­vest­ment. It was ranked the fifth city in the UK for in­vest­ment, be­hind Lon­don, Birm­ing­ham, Manch­ester, Bris­tol and Ed­in­burgh. Sh­effield was ranked 11th.

Les­ley Males, Datscha’s head of re­search, said: “Quar­ter three qui­etened down ev­ery­where. In York­shire, some of that was prob­a­bly driven by a lack of sup­ply of lo­gis­tics hubs. A lot of de­vel­op­ment sites are com­ing out that have been for­ward funded or spec­u­la­tively de­vel­oped. That could be what is driv­ing the re­gional data down.”

How­ever, in­vest­ment in the re­gion for the first nine months of the year is still 42 per cent ahead of the same pe­riod last year, with £2.56bn of in­vest­ment com­pared to £1.8bn.

The big­gest two deals in York­shire dur­ing Q3, ac­cord­ing to Datscha, were in Sh­effield.

The first was the £51.7m pur­chase of the Mor­risons su­per­mar­ket at the for­mer Hills­bor­ough Bar­racks by Su­per­mar­ket In­come REIT.

The sec­ond was Le­gal and Gen­eral’s £48m in­vest­ment in Steel Vul­can House.

In­vest­ment in Sh­effield leapt 60 per cent from £250m to £401m.

In­vest­ment in Leeds com­mer­cial prop­erty in­creased 70 per cent, to the end of Q3 in 2018, com­pared to the same pe­riod in 2017.

Ex­am­ples of sig­nif­i­cant port­fo­lio deals, with as­sets in Leeds, in­clude the Foncieres des Re­gions £858m ho­tel port­fo­lio deal as well as the £1.2bn MRH Petrol Sta­tion port­fo­lio.

In­vestors, both do­mes­tic and from over­seas, ac­quired com­mer­cial prop­er­ties to the value of £688m in 2018 ver­sus £403m in 2017 – a near three quar­ters in­crease.

Datscha, the proptech plat­form which shows ul­ti­mate own­er­ship of com­mer­cial prop­er­ties, tracks deals worth more than £3m each.

It also un­cov­ered port­fo­lio deals matched with lat­est Land Registry data – us­ing the pe­riod from Jan­uary 2017 to Sep­tem­ber 2017 against the same pe­riod in 2018.

UK in­vestors in­creased their in­ter­est in Leeds from £305m in 2017 to £498m in 2018.

Ms Males said: “Leeds has per­formed well as a re­gional city over the past 12 months. It’s en­cour­ag­ing to see strong UK do­mes­tic in­vest­ment at a time when the mar­ket is slow­ing down ahead of the Bri­tain’s de­par­ture from the EU.

“This shows the city’s value to UK in­vestors, un­like other re­gional cap­i­tals which seem to gain their lion’s share of in­vest­ment from abroad. De­mand for com­mer­cial prop­erty in­vest­ment in the re­gion should con­tinue.”

DE­LAYED DE­CI­SIONS: York­shire’s com­mer­cial prop­erty in­vest­ments slowed in Q3 but Leeds is still one of the UK’s top five in­vest­ment cities.

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