Commercial Property Market in the North West
The commercial property market in the North West saw an increase of 46% in investment activity in 2017 to over £4billion. Investment volumes for the first quarter of 2018 were also at a record high of £965m. This figure is more than double the £440m invested in the North West in the last quarter of 2017.
There has been a distinct shortage of good quality new build grade A office stock in the North West. Demand is particularly high in Manchester city centre, with only around 160,000 square feet of Grade A office space currently available. However, the top investment in the region for the first quarter of 2018 was office space, which made up 41% of all transactions, which suggests that supply will soon catch up with demand.
Knight Frank reported a fall in take up for industrial property in the second half of 2017, but stated that it is partly due to a lack of stock, which has fuelled a wave of speculative development in the region. The report predicted a bounce back for take up of industrial property in 2018. Investment demand for industrial stock remained encouraging in the early part of 2018 and demand is expected to continue.
Research by Colliers has shown retail rents dropping by 1.5% in the last 12 months. Traditional high street retail continues to be affected by the convenience of internet shopping and out of town retail, which is proving to be a problem across the UK, particularly for the shopping centre investment market. However, retail rents in Manchester city centre are up by 4% and 1% in the Trafford Centre, but smaller centres including Oldham, Ellesmere Port, Northwich and Chorley have seen double-digit rental declines over the last year.