LSH: Demand for investment stock continues to outweigh supply
Investor demand in the North West remains stable despite macro-economic uncertainty, but nervous vendors are holding back product to see what happens in the market, contributing to a 60% fall in the total value of transactions in the first quarter of the year, according to figures released by Lambert Smith Hampton.
There was a notable absence of large deals at the start of this year compared to last, when the refinancing of Liverpool ONE in January 2016 and the sale of Piccadilly Place offices in Manchester to Ares boosted figures.
Economic uncertainty has caused some vendors to postpone sales so there remains the problem that there is not enough property to meet investor demand. Despite some good deals in Q1, transactional activity in the North West was down 60% year on year and 20% on the five-average.
The North West saw total transactions across all sectors in the last quarter amount to £438m, with the most notable deals taking place in Manchester and Liverpool city centres; DTZ Investors’ purchase of The Printworks in Manchester from Land Securities for £108m and Royal London’s sale of the Royal Liver Building in Liverpool to Corestate Capital for £48m.
LSH said with demand for central Manchester stock now highly competitive, investors are looking at other parts of the region for opportunities to buy.
Ben Roberts, director at LSH, said: “The concerns surrounding Brexit and the upcoming general election are limited, with investor interest in the North West enduring and in particular Manchester being a focus for many investors. Those opportunities that have been on the market have received strong interest which has started to encourage vendors to push on with sales. As a result, we expect strong investor appetite over the next quarter with an increase in off-market deals as investors seek to invest.”