Overseas investors accounted for 72% of all office acquisitions in Manchester last year, deals totalling £489m, dominated by German buyers, according to research by Savills.
The firm’s latest Office Spotlight report states that overseas investors ploughed £5.8bn into the UK’s regional commercial property market in 2016, equating to 29% of total investment outside of London, with Manchester being a particular hot spot.
The firm highlights noteworthy appetite in the UK regions from European investors, which had a 32% market share of commercial property investment outside London in 2016. German investors accounted for almost half of this. This was reflected in Manchester, where German investors acquired more commercial property than any other nationality last year, in deals totalling £376m. These included Deka Immobilien’s £164m purchase of One St Peter’s Square and Union Investment’s £85m acquisition of the XYZ building.
In Manchester, US investors were the second most active nationality in 2016, with a 36% market share of total overseas commercial property acquisitions. This included Ares Management’s £115m purchase of 3 and 4 Piccadilly Place.
Nick Okell, investment director at Savills Manchester, said: “The UK is an attractive investment destination for global buyers because of our legal system, landlord-friendly regulations, standardised market, time zone and culture. The recent Sterling devaluation has made pricing even more attractive for investors whose currency is pegged to the US dollar. Manchester’s global profile means international demand for commercial property assets in the city looks set to remain strong throughout 2017.”
James Evans, head of Savills Manchester, added: “Confidence in Manchester’s commercial property market is robust. In the offices sector, demand did not waver after the EU referendum, with 70% of last year’s 1.3m sq ft total lettings taking place in H2. Combined with all the other ingredients Manchester has to offer, the city is well-placed to deliver significant high value business growth and attract further inward investment.”