Regions start to look attractive, says Lambert Smith Hampton
Lambert Smith Hampton says investors in commercial property are expected to turn their attention to prime real estate beyond the confines of central London this year.
In its UK Investment Transactions (UKIT) Quarterly Bulletin for Q4 2010, the firm says that while central London and the southeast look set to continue their dominance of activity this year, good-quality stock in key regional markets is also forecast to gain interest from investors as the central London market gets squeezed. Central London activity accounted for 44% of the total in 2010, the firm notes.
Banks are under pressure to cut their exposure to property loans and “stock-gap” funding is therefore starting to become evident, in the form of joint ventures and investment managers, LSH points out.
Ezra Nahome, CEO and head of capital markets at LSH, said that although investors would have to look hard to find value, “there is opportunity out there”. He cautioned that this was a “back to basics” market that required real understanding of local market situations. “Provincial office markets and industrial sectors have seen transaction yields shift up to the extent that they will eventually offer the opportunity to buy good value at yields far in excess of the market average. Investors are already monitoring the market, waiting for the opportunity to snare any suitable assets,” he noted.
