Uncertainty about the outcome of the General Election has failed to dampen investment in the commercial property sector during the first quarter of 2015, according to Lambert Smith Hampton.
The latest edition of Lambert Smith Hampton's UK Investment Transactions report reveals that in the North West total investment reached £977.5m in the opening three months of 2015. This figure was 352% greater than the same period last year and the second highest quarterly total since Q1 2011, beaten only by Q2 2014.
A surge of overseas investment has been significant in this strong performance, with inflows from international investors doubling from the same period last year to reach £156.34m. However, UK institutions are still dominant in the North West increasing year-on-year by 344%.
Office and retail asset classes saw double digit increases in investment compared to the same period last year. Office investment accounted for 47% of total investment at £455.6m which is a 168% increase compared with Q4 2014. It should be noted that this includes the significant deal of £251.5m at MediaCity by Legal & General, taking a 50% stake in the scheme which houses the BBC, ITV and University of Salford.
Demand in the alternative sectors was also buoyant; investment into hotels was particularly notable at £98.8m in Q1 compared with no hotel investment in the same period in 2014. Activity in this area included £45m investment by M&L Hospitality for Crown Plaza and Staybridge and The Ability Group £21.35 investment as part of the Green Quarter development.
Abid Jaffry, regional head of capital markets at LSH, said: "The outcome of the General Election may be the most uncertain in a generation, but the case for investment in UK commercial property remains robust.
"As a rule, investors don't like uncertainty. However, factors such as the ongoing low interest rate environment, the welcome return of rental growth across the length and breadth of the UK, and the country's reputation as an economic safe haven are having a positive influence in the market.
"The high level of transactions so far this year in the North West is mainly from a hangover of deals from the end of 2014. There has been very little stock brought to market over the last quarter which may impact on the level of transactions going forward in 2015.
"A speedy resolution to any coalition negotiations will also be important if the strong start to the year is to be maintained."