UK commercial property annual returns hit 10.5 per cent in 2013 | 3 February 2014
Increased investor confidence led to annual returns in the commercial property market reaching 10.5 per cent in 2013, the highest amount seen since 2010.
As reported by fundweb.co.uk, the data from Investment Property Databank (IPD) also showed that commercial property returns rose by 4.4 per cent during the last quarter. Regional property value increases were the biggest driving factor, showing how the commercial property market is beginning to recover outside of London.
In fact, IDP found that 63.6 per cent of the UK’s commercial property is located outside of London. This regional recovery is down to the growth of investor confidence, which is a result of the improving economy in the UK.
Phil Tily, IPD executive director and head of UK and Ireland, said the gap between London and the rest of the UK has been growing for some time.
“The improved economic outlook is having a more widespread impact on the latest performance results,” he stated. “Though London returns remained highest overall in 2013, the heavy discounting of regional assets and their high income returns are providing the potential for value add plays, feeding through into stronger regional returns over recent months,” reports ipd.com.
Commercial property values rose the most in Aberdeen, Brighton and Cambridge, where values shot up by over 3.5 per cent in each area during the final quarter of last year. Overall, commercial real estate outside of London received a boost of 2.2 per cent in value over the same period.
The views expressed in this post are those of the author and are not necessarily those of Qube Global Software. All facts are verified where possible directly by the author.
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