Property investment slows in the region

Panoramic view of Leeds city
Panoramic view of Leeds city
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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.”