East Midlands sees strong industrial property investment in Q1 according to new figures

Adam Ramshaw, head of region for LSH in Birmingham and the East Midlands

Investment in industrial property across the East Midlands got off to a good start during the first quarter of 2016, according to new research published by national commercial property consultancy Lambert Smith Hampton (LSH).

The latest edition of the company’s quarterly UK Investment Trends (UKIT) report reveals that while overall investment in the region totalled £0.08 billion during the first quarter of the year (less than a third of the five-year average), certain sectors performed well: with the industrial sector accounting for 47% of the total volume invested at £38.18 million.

Retail deals made up 19% of the total invested with £15.40 million of acquisitions. Office transactions stood at £27.65 million, 34% of all transactions.

Total activity across the UK during Q1 2016 totalled £11.7bn.

Key industrial deals during Q1 include Hortons Estate buying Old Dalby Business Park in Melton Mowbray for £10.65 million and CCLA Investment Management’s purchase of 70 Sinclair Drive in Wellingborough for £6.60 million.

The largest deal of the quarter was the sale of offices at Riverside Road, Pride Park in Derby to Praxis Asset Management for £11 million.

Adam Ramshaw, Head of Birmingham and East Midlands at LSH said: “While property investment in the East Midlands in Q1 was lower than recent averages, we saw a strong showing from the industrial sector, which accounted for almost half of transactions.

As revealed in our Industrial & Logistics Market 2016 Report, take up of medium-sized units was particularly strong in 2015 and this is something that we expect to continue through 2016.”

The research also found that appetite remains strong for regional property assets across the rest of the UK, with £4.5 billion invested outside of London during the quarter – 6% above the five-year average.  Conversely, investment in the capital was significantly down on the five-year average, meaning that figures for the UK as a whole are at the lowest quarterly total for almost three years.

Ezra Nahome, CEO of Lambert Smith Hampton, believes the national figures, driven by a reduction in purchases by overseas buyers, are a result of uncertainty around Britain’s membership of the EU.

He said: “It’s no surprise that investors have taken a step back in the face of June’s EU referendum.  Brexit concerns aside, the market remains in a fundamentally strong position and we don’t see any reason why activity won’t bounce back if the country elects to remain part of the EU on 23 June.”