Tom Edgar of GBR Phoenix Beard’s investment agency team has said that following the green shoots of 2013, the property investment market continues to strengthen in 2014. In the past three years, the team has been involved in the purchase or sale of 35% of the Birmingham Office Market Forum (‘BOMF’) area office investment transactions, including involvement in the sale of One Brindleyplace let to Deutsche Bank, One Colmore Row, and the acquisition of 84 Colmore Row.
Tom Edgar, a surveyor in the investment agency team at GBR Phoenix Beard has been monitoring trends and commented:
“Throughout the year interest in the UK regional markets has increased, with the last three months of 2013 showing significant trading volumes both in terms of individual and portfolio transactions. We are seeing bank debt becoming more available, with the major banks looking to lend to the sector at higher LTV’s (‘loan to value’) than those seen in the recent past. However, whilst pre-let funding finance is more available, funding for speculative projects remains limited. The high levels of competition in the South East have resulted in investors targeting UK regional markets, particularly office and industrial sectors in cities such as Birmingham, as evidenced at the end of 2013 which saw a large number of investors bidding on a limited supply of stock.
Certainly one of the reasons for the uplift in demand for office investments in Birmingham has been the increase in office lettings and tenant demand. BOMF showed total take-up for 2013 to be 664,167 sq ft, closer to the long term average of 710,000 sq ft and up by nearly 30% on 2012. A total of £90m in 11 transactions took place during the year (GBR Phoenix Beard were involved in five) and the end of the year saw a number of investment transactions agreed, with completion due early in 2014. Prime yields across the year contracted from 6.25% to 5.75% and continue to trend in, reflecting the high demand for the limited available stock.”