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14 Nov 2012

Investors Show Renewed Interest In UK Regional Cities

There has been a rebound in interest in regional real estate in the UK over the past 12 months, Jonathan Baines, of real estate specialist Colliers International, wrote in the South China Morning Post on Monday.

According to Baines, the renewed interest in properties in regional British cities is a result of the falling yields and rising capital values in London. As new development in the capital has stalled over the past five years and yields have declined because of weak investor demand around the world, investors have turned to regional cities such as Manchester, Birmingham, Edinburgh, Cardiff and Bristol as they offer stronger returns and lower capital values.

Offices and shops outside the capital are the main attraction for investors, as well as industrial, distribution and logistics properties located at good places in the big cities which are let on long leases to dependable tenants.

While domestic UK investors account for most of the investment and development in regional cities - as is the case in all local markets worldwide - Asian investors have shown a renewed interest in prime property in UK regional centres due to each regions´ specific dynamics, Baines said.

The appetite for regional property is expected to continue into and past 2013 as many investors look to broaden their focus to key cities in the UK in addition to London.

Meanwhile, the key real estate sectors in the capital are still enjoying robust investment interest as a result of the uncertainty surrounding the eurozone and also thanks to the attractiveness of investment in UK real estate.

Copyright © M2 Bespoke 2012

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