Sale of India Buildings for £125m was one of the key deals in Q1

Property deals near £1bn in first quarter

Property investment in the North West for the first quarter of 2018 hit £965m, more than double the volume for the same quarter in 2017, according to Lambert Smith Hampton’s latest UK Investment Transactions report.

The first three months of 2017 saw property sales total £440m.

So far this year, office transactions have dominated, making up 41% of the total, while retail fell behind with the only significant transaction being Rosette Merchant Bank’s acquisition of Tesco in Oldham for £50m. The region’s office performance has been buoyed by two significant transactions, L&G’s acquisition of India Buildings in Liverpool for £125m and Aviva’s acquisition of 2 New Bailey in Salford for £113m.

According to LSH, these same deals also highlight the continued appetite from UK institutions and overseas investors for secure, long-let investments, for instance India Buildings’ 25-year lease with HMRC, 2 New Bailey’s 25-year lease with Salford Council and additionally the 35-year income strip with Rochdale Council at the Riverside scheme.

The first quarter of 2018 has been one of the strongest quarters for alternative property investments. The most significant assets to change hands were the Manchester Arena which Mansford disposed of for £102m and Invesco’s forward-funding deal of 383 build-to-rent units in Liverpool, at £86m.

Ben Roberts, director of capital markets for LSH in the North West said: “The North West has performed very strongly, particularly when compared with the national data and we’re continuing to see a broad range of investors keen to invest into the region.

“The Q1 volumes are surprising given the recognised lack of stock and it is positive to see the North West having such a stellar start to the year.  However, with squeezed stock levels and downward pressure on yields, stock selection is becoming even more important. Most interestingly, the alternatives sector has attracted significant investment so far this year and this is set to continue.”

The full report is available to download here.

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