YORKSHIRE looks set to become one of the property winners of 2015 as more investors look beyond London and the South East, according to property agents JLL.
Investment volume figures compiled by JLL reveal that Yorkshire had a bumper 2014, with around £1.4bn of commercial property investment transacted. The property agent predicts that activity in Yorkshire will be strong again this year.
Andrew Summersgill, a director in JLL’s investment team, said: “We have seen a boom in investment volumes over the last couple of years and anticipate another healthy year in the Yorkshire property market, although we are unlikely to repeat the same levels as 2014. One reason for this is the political uncertainty around the May election, which is the hardest to call in living memory and may lead to a pause in market activity.”
JLL also predicts that there is likely to be increasing activity in the secondary property market, which may become more attractive, given the yield gap between it and the prime market.
Mr Summersgill added: “Total property returns in 2015 are as likely to be driven by rental performance as yield shift, which makes supply and demand, and the dynamics of the occupational market just as important to investors.”
The Leeds market has historically been “feast or famine” in terms of the construction of new supply, according to JLL,
Richard Thornton, director in JLL’s office agency team, said: “Currently, there is around 455,000 sq ft of purely speculative development on site in Leeds city centre. Of this, some 160,000 sq ft is already spoken for, with ongoing pre-lets and negotiations resulting in around 300,000 sq ft of grade A space coming on stream by mid-2016. With current take-up levels, this space will let within 12 months of practical completion, if not earlier, so there is a case for developers to bring more speculative space to the market within the next two years.”