Investment in the commercial property sector in the West Midlands during the third quarter of 2015 reached £629 million – up 23% on the previous quarter, according to commercial property consultancy Lambert Smith Hampton (LSH).
The latest edition of LSH’s UK Investment Transactions (UKIT) report reveals that the office sector accounted for 60% of the total volume invested in the region at £379.6 million, while industrial accounted for almost 16% of transactions with £97.5 million of acquisitions.
Key office deals in the region include Colmore Plaza, acquired by Ashby Capital Limited for £140 million; One Colmore Square which was purchased by Legal & General for £87.3 million and Birmingham Business Park acquired by Blackrock for £84.8 million.
The report also reveals that the average size deal in this quarter was £17 million, an increase on the five-year average of £13 million.
Adam Ramshaw, head of office for LSH West Midlands, said that quarterly activity in the West Midlands remains 45% above the five-year average, with a broad spectrum of buyers seeing opportunity and value in the region.
The national picture saw investment in the UK commercial property sector during the third quarter of 2015 reach £12.8bn, according to the UKIT report.
Although this represents a 23% decline on the previous quarter – and is the third successive quarter in which volumes have fallen – investment for 2015 as a whole may just eclipse the record of £61.7bn set last year. Investment for the year to date currently stands at £48.5bn.
In addition, the report reveals that investment volume in the UK regions during Q3 exceeded that in London for the first time in 12 months. This helps to explain the reduction in the average lot size from £35m to £25m, and the fact that total transaction volume fell despite an 8% quarter-on-quarter rise in the number of deals.
Ezra Nahome, CEO of Lambert Smith Hampton, said: “We continue to see high levels of interest among investors for UK commercial property.
“Although there are signs that the market is starting to return to more sustainable levels of activity, we’re seeing a considerable stock of properties under offer, on the market or being prepared for sale. This all points to a dynamic end to 2015 and a very real prospect that investment will hit a new annual record this year.
“London continues to perform strongly and will remain the most important market for overseas investors. However, it’s encouraging to see capital flowing back into the regions in a meaningful way as investors rebalance their portfolios in response to improving confidence and the price of assets in London.”