Investors looking to the regions

The fund, which owns the Junction 27 retail park in Birstall in West Yorkshire, reported a four per cent increase in the value of its regional portfolio over the three months to December 31.

Robert Boag, senior investment director of UK Commercial Property Trust, said: “We are seeing more investors looking at the regions and wanting to invest in good quality sites.”

The 4.3 per cent increase over the quarter was a big improvement on the 0.5 per cent increase in the previous quarter.

“A lot of institutions and private equity investors are deeming London too expensive. They are looking for more of an increase in the regions,” said Mr Boag.

“They are being very selective and looking at better quality office buildings that are well-lit, modern and in central business districts where rents have fallen back.”

Mr Boag said that the Junction 27 retail park has seen its value increase over the past year.

The trust bought the site, which borders Ikea and Marks & Spencer, for £54m in 2010. Tenants include Pizza Express and PC World.

“The park was a significant contributor to the 4.3 per cent increase in the regions. It was probably in excess of 4.3 per cent,” said Mr Boag. “Investors are looking for an increased yield which retail parks offer. It’s wrong to say that all parts of retail are suffering. Retail warehousing is fairly resilient.”

The trust reported a 4.2 per cent increase in its portfolio valuation over the quarter on a like-for-like basis before capital expenditure.