The volume of money flowing into institutional funds over the past 18 months has increasingly targeted major regional cities including Bristol, according to new research released by CBRE.
CBRE’s Monthly Index has highlighted capital growth of 10.6% over the 12 months to the end of April 2015, with total returns of 18.6%. The property firm says this has been driven by an increased desire from investors to seek high value properties outside of the overpriced London market, which has resulted in the acceleration of yield compression.
Andrew Sayner, Head of Investment at the Bristol office of CBRE, commented: “Strong interest from investors in the Bristol market has emerged at the same time as a resurgence in the occupier market in the city, with the momentum generated by record levels of take-up at the end of 2014 continuing in the first six months of 2015.
“We have also seen a brand new wave of speculative development activity, with Bristol seeing some of the earliest schemes in this cycle. These developments are already setting new headline rental figures and a new standard for high quality stock.”
CBRE’s research has also revealed that prime office yields across the UK regional markets have continued to decline sharply during the first half of 2015, with the average yield being 5.25%. Meanwhile, there is evidence of rental growth becoming more widespread and strong growth in retail sales, particularly in the household goods sector.