Core Cities, Core Strengths, a new research report from global property adviser, CBRE has calculated Southampton saw £1.3bn of commercial property investment over the last decade, which equates to £3,517 per capita, well ahead of other regional cities such as Liverpool, Birmingham and Nottingham. Overall the UK’s regional cities have seen a total £44.4bn invested over the last 10 years.
CBRE’s report, which is the first of its kind to compile this level of detail analyses 12 regional cities. Key indicators for a city’s success: civic leadership, talent in growing sectors, quality of life and ‘placemaking’, and infrastructure, providing a detailed review of the main city property markets outside London, and the opportunities and risks of devolution were all addressed in the research. It also includes ‘softer’ indicators such as the number of 5 star hotels or Michelin star restaurants.
James Brounger, Managing Director of CBRE’s Southampton office, said: “While Southampton is one of the smaller cities analysed in the report, the investment per capita shows that it can compete with some of the UK’s larger destinations. Looking forward, prime rent growth is forecast to be 4.7% over the next five years, a key indicator that Southampton is now catching up with other regional cities.”
In total, the regions beyond London and the South East account for almost 60% of all UK commercial real estate transactions. The findings show that investors have diversified their property holdings as part of the recent economic recovery with emerging investment sectors such as healthcare and student housing increasing their share of the market. Pre-financial crisis, these assets accounted for 3% of investment; this has trebled to around 10% of total investment volumes today.
Miles Gibson, Head of UK Research at CBRE, said: “The UK’s core cities face an unprecedented opportunity. Whatever the relative position of individual cities, the ongoing economic recovery provides an opportunity for them all to maximise the hand that they have been dealt and, in some cases, the legacy they have to deal with.
“Volumes of international investment are now so significant that even London is struggling to absorb it all. The UK’s core cities have a unique chance to capitalise on the world’s current desire to have exposure to Britain and its property market. It is crucial for the continued success of the UK as a whole that they take it.”
