Business : Finance & Investment News

INTERCHANGE 26 AGREES FORWARD FUNDING DEAL AT J26 M62

213,000 Sq Ft Industrial Units To Boost Supply Shortages Interchange 26 LLP has completed on a forward funding deal with 4th Industrial (UK) LP for up to 213,000 sq ft of new industrial units at the Interchange 26 logistics and manufacturing hub in West Yorkshire. The new scheme has the

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Birmingham Property Investment Group Appointed by National Developer

Joseph Mews Property Group announces appointment by Consortia Developments Birmingham property investment group Joseph Mews has been appointed by London-based property development company Consortia Developments. The newly formed group, which is based within the Jewellery Quarter, is to work with Consortia Developments to bring the new Lockside Wharf apartments in

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Can the UK construction industry weather the brewing economic storm?

In normal circumstances the construction industry is a bellwether sector for the wider economy and it’s not difficult to work out why. When homes, offices, factories, and roads are being built, it’s the most visible sign of confidence in the economy because people are funding their construction for others who

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LabTech agrees deal to sell Victoria House

LabTech has agreed the sale of the 300,000 sq ft Grade-II listed landmark, Victoria House, WC1, to a leading global real estate investor in a transaction valued in excess of £420m. Robert Akkermann, Chief Investment Officer of LabTech, says: “We acquired this building with the vision to transform the iconic

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FORWARD FUNDING DEAL COMPLETES FOR NEW 4 STAR MANCHESTER HOTEL

CBRE Investment Management has completed a transaction to provide forward funding investment to RJR Securities for the development of a new 188-bedroom Maldron Hotel on Chapel Street in Manchester City Centre. Dalata Hotel Group plc, the largest hotel operator in Ireland with 45 hotels across the UK and Ireland, has

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Lismore’s review highlights positive Scottish investment market during 2021 with total volumes up 24% from 2020

Alternatives market rebounds strongly and ESG continues to drive pricing Leading independent property advisory firm, Lismore Real Estate Advisors today released its comprehensive review of the Scottish investment market for the final quarter of 2021 and predictions for 2022. Despite the ups and downs faced during 2021, the Scottish investment

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Issue 326 : Mar 2025

Business : Finance & Investment News

Positive signs for UK construction as value of new orders reaches four-year high

Dominick Sandford, Managing Director at IronmongeryDirect and ElectricalDirect, said:  “Last year saw yet more turbulence for UK construction, but the latest figures show that the industry ended 2021 on a real high.  “The value of new orders rose by 9.2% between Q3 and Q4 to an impressive £13.3bn, which is the highest figure in over four years, since Q3 in 2017.  “It also represents a 35% increase year-on-year, up from £9.9bn in Q4 2020, showing a real surge in momentum.  “The infrastructure sector drove the largest rise in new orders; at the end of 2021, the value of new orders rose by 23% from £1.7bn to £2.1bn.  “The private industrial sector also performed well and reported the second most significant increase (22% – up to £1.9bn).  “They still have some way to go to catch the highest value sector though, with private commercial construction rising 14% to remain in the lead (£3.8bn).  “Not all sectors saw growth, however, with housing in particular having a slow end to the year. The value of new public housing projects dropped by 19%, from £426m down to £345m, and private housing was also down (-0.4%, down to £3.7bn).  “As well as variation between sectors, the figures also contrast dramatically across the UK. By far the largest increase was seen in the North East of England, where the value of new orders trebled (200%) from £575m to £1.7bn.  “In London, the value fell by 15%, but at £3.8bn, the capital remains top of the list for regions.  “Overall, the new data shows that UK construction is in a really positive place. With expensive new orders being placed all over the country, it’s a clear display of confidence in the industry.  “Hopefully this trend will continue into 2022.”  For more information on IronmongeryDirect, visit: https://www.ironmongerydirect.co.uk/   For more information on ElectricalDirect, visit: https://www.electricaldirect.co.uk/ 

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INTERCHANGE 26 AGREES FORWARD FUNDING DEAL AT J26 M62

213,000 Sq Ft Industrial Units To Boost Supply Shortages Interchange 26 LLP has completed on a forward funding deal with 4th Industrial (UK) LP for up to 213,000 sq ft of new industrial units at the Interchange 26 logistics and manufacturing hub in West Yorkshire. The new scheme has the potential to create some 300 new jobs for the region. The forward funding commitment will see the delivery of three units at the prime logistics hub located at the major J26 intersection of the M62 Transpennine motorway and M606 Bradford link. Reserved matters consent has recently been granted by Kirklees Council for a 64,500 sq ft unit and a 43,500 sq ft unit. A further planning application is under consideration for up to 105,000 sq ft, which forms the final phase of development. GMI Construction has been appointed as contractor and work is scheduled to commence on site in early 2022 with delivery of the two consented units expected in late Summer 2022. Works on the final phase will commence once planning has been considered by Kirklees Council. Interchange 26, an Opus North & Network Space Capital owned company, acquired the former water treatment works site on an unconditional basis in 2019 to facilitate the development of prime industrial accommodation and address the severe regional shortages. A comprehensive remediation and earthworks package has now been completed.  This latest deal follows on from Interchange 26’s 10.4 acre land sale in 2020 to British Airways Pension Trustees Limited and Tungsten Properties. Work is underway on Super B, a new big box warehouse, which is set for completion in Q3 2022. Interchange 26 forms part of Opus North’s wider development strategy to enhance its £250m development programme with a focus on the logistics sector. Ryan Unsworth, Development Director of Opus North, said; “This forward funding agreement will enable us to bring three much needed mid-box units to the severely constrained regional pipeline, fulfilling our vision for this strategic site. This development will go some way to addressing the supply and demand imbalance in South Bradford and North Kirklees, while facilitating new jobs for the wider region.” 4th Industrial is a commercial real estate company that invests in multi let and light industrial property and was founded by experienced industrial property specialist Derek Heathwood. As of January 2022, the 4th Industrial portfolio totals 2.15m SFT across 12 estates located in key industrial submarkets across the UK. Interchange 26 LLP was represented by Dove Haigh Phillips and Knight Frank in the transaction while 4th Industrial represented themselves.

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FIRST WORLD HYBRID REAL ESTATE Plc (FWHRE) snaps up suburban retail park

West Retail Park acquired in £11.70 million deal FWHRE, an Isle of Man Regulated Fund, listed on The International Stock Exchange (TISE), has completed the acquisition of units 1A and 1B, West Retail Park in the affluent residential suburb of Milngavie, just north of Glasgow. The two units are let to Aldi and Home Bargains until June 2039 and June 2034 respectively. The Aldi rent reviews are linked to RPI. Over the past 24 months, both supermarket and discount retail assets have been highly sought after, with investors attracted by the retailers resilient trading performances and the long leases that characterise that sector. The purchase price of £11.70 million reflected a net initial yield of 4.86%. Lismore Real Estate Advisors and Avison Young jointly advised the purchaser, whilst Sheridan Keane acted for the vendor.

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Birmingham Property Investment Group Appointed by National Developer

Joseph Mews Property Group announces appointment by Consortia Developments Birmingham property investment group Joseph Mews has been appointed by London-based property development company Consortia Developments. The newly formed group, which is based within the Jewellery Quarter, is to work with Consortia Developments to bring the new Lockside Wharf apartments in Birmingham City Centre, to market. The canal-side development, based on Scotland Street, was formerly an office building. Work has already begun to convert it into 16, one-bedroom and two bedroom duplex apartments. There will also be roof extensions, which will house four penthouse-style apartments, and a new building on the adjacent car park, creating an additional 45 homes, three of which will be affordable. Olly Clayton, Partner at Consortia, said: “Lockside Wharf is one of the most exciting new developments for Birmingham city-centre. This is why we’ve partnered with Joseph Mews to help bring it to market. “Aside from their extensive past performance in the city’s development sector, they understand what it takes to help deliver a high-end project such as Lockside Wharf in an increasingly competitive central Birmingham market. “With Lockside Wharf covering nearly 45,000 sq.ft of waterfront space minutes from the highly desirable Jewellery Quarter and Brindleyplace, it represents a truly thoughtful restoration – a unique addition to the local market composed of beautiful warehouse-style apartments. We can’t wait to see Lockside Wharf take shape and how Joseph Mews will help bring this stunning new development to an entirely new audience.” The Joseph Mews Property Group, which officially launched at the start of the year, was set up by former SevenCapital sales director Andy Foote Andy said: “We are really proud to be working alongside such a well established company, and on such a great scheme right in the heart of the city we love so much. Consortia Developments are really creating a fantastic addition to the city with Lockside Wharf being redeveloped, and we are looking forward to working with them to bring such incredible homes to market.” Lockside Wharf is expected to complete in the second quarter of next year. For more details about Joseph Mews email Sales@Joseph-Mews.com or visit www.joseph-mews.com.

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Can the UK construction industry weather the brewing economic storm?

In normal circumstances the construction industry is a bellwether sector for the wider economy and it’s not difficult to work out why. When homes, offices, factories, and roads are being built, it’s the most visible sign of confidence in the economy because people are funding their construction for others who are willing to pay to live in them, use them or employ people to work in them. But circumstances are nowhere near normal, and they haven’t been for some time. Just as the effects of Brexit are starting to kick in, the stop-start impact of the Covid pandemic has made predictions about the health and even the direction of the construction industry – and the wider economy – extremely difficult to make. Just as new figures appeared to show signs of supply shortages easing, Omicron emerged, threatening to scupper any progress made in unblocking bottlenecks. Added to that are soaring energy costs – with warnings that fuel bills could rise by 50% by the Spring ­– which have contributed to inflation rising to levels not seen since the start of the 1990s. With those external pressures bearing down on the sector, it’s understandable that forecasters are expecting material shortages to drive up tender prices this year and next. According to global construction consultancy Mace, UK tender prices are expected to be 4.5% higher this year, compared with last, and 2.5% higher than it predicted last September. While Mace expects inflation to slow next year, tender prices will be 3.5% higher than in 2022 and even the elimination of Omicron and the smoothing of Brexit related road bumps are unlikely to alter that. The main short-term issue for the construction industry continues to be widespread material and labour shortages, which is driving price growth. Last month Arcadis warned that rising energy costs could push construction tender prices up by between 4% and 5%. News from the Timber Trade Federation (TTF) at the start of the month that timber supplies and costs are expected to stabilise – due to more regular demand for housing and imports increasing to pre-pandemic levels – will be of little comfort. Price volatility always leads to delay and inaction, as project sponsors and developers hold off on inviting tenders, more in hope than expectation that the picture in six months or a year will be clearer. Contractors across the UK have already had to contend with rising tender prices caused by higher material costs, with some projects being halted and retendered. According to the Chartered Institute of Procurement and Supply’s latest snapshot of 150 construction companies across the UK, many are reporting delays to decision making by clients, contributing to the slowest sector growth for three months. There was some good news with the number of firms reporting supplier hold-ups falling from 47% in November to 34% in December, as fewer shortages of building supplies improved delivery times, but there’s no guarantee that trend will continue. However, those forecasts don’t take account of measures that can be taken by the industry or government to assist. As the recent vaccine rollout demonstrated, we are at a stage far in advance of where we were at the start of the pandemic in dealing with and working through the pandemic. Business resilience and continuity plans are more developed, allowing companies across the supply chain to work through the imposition of restrictive measures with less disruption. Last year companies were hampered by the triple whammy of fuel supply, lorry driver shortages and supply chain delays while also dealing with the impacts of Covid, Brexit and labour shortages. Many have learned from the experience and put in place contingencies to ensure those factors can be dealt with more efficiently and expeditiously. As costs for fuel, energy, labour, and materials rise, bidders are altering their commercial assumptions, insisting on more flexible change control provisions in contracts, with clearer and more detailed clauses that reflect the potential for external factors to cause disruption and delay. Amid this uncertainty cost consultants are proving their worth by providing valuable insights into likely market rates and supply trends as well as offering advice on cost saving and adding value to projects. Governments are playing their part with the commissioning of public sector infrastructure projects and long-term housebuilding targets. Governments at Westminster and Holyrood have long championed small-to-medium sized enterprises (SMEs) enjoying a greater share of public procurement business but this needs more urgent attention. It’s clear from research and anecdotal evidence that SMEs find the public procurement process challenging and many need additional support with bid submissions. Brexit and the Covid pandemic have introduced changes to the way everyone does business and the construction industry is no different. Given its importance to the economy, it is monitored and used as a gauge of how the wider economy is performing and the message, we should be sending out is that the future can be a lot brighter than current statistics suggest. Ryan Gilluley is managing director of GCM Ltd, a Lanarkshire-based firm of cost consultants, claims and disputes experts for the construction and engineering sectors.

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UK Land Estates looks to help create jobs with Tyne Tunnel Trading Estate expansion plans

MORE than 250 jobs could be created under plans to expand Tyne Tunnel Trading estate to create additional high-spec industrial and retail facilities. UK Land Estates, the largest commercial property and investment company in the North East, has submitted plans to North Tyneside Council which aim to transform the 5 hectare site of the former Corning’s glass works on the Tyne Tunnel Estate into more than 14,000 sq m of industrial-led units. The site, which is part of the 2 million sq ft Tyne Tunnel Trading Estate in North Tyneside, will be developed into a mix of industrial and trade units, along with two drive-through outlets providing much-needed amenities on the estate.  On completion, the development is expected to create up to 270 jobs. The £12.5m expansion would also support an extra 45 jobs in its construction phase and could help create more than £2.8m worth of extra economic value for the area every year. With direct access to the A193 linking to the A19 – which forms part of the National Strategic Highway Network – the estate is easily accessible with good transport links. Keith Taylor, managing director at UK Land Estates, said: “This is an exciting development that we’re hoping will bring future investment and create jobs in several industries. “It is a strategic site with excellent connectivity to the north and south thanks to massive investment made in the local road network over the last five years removing bottleneck junctions on the A19 and providing an upgrade to the Tyne Tunnel. It is situated perfectly to serve businesses in North and South Tyneside and Newcastle areas as well as markets to the north and south of the region. “With the site being derelict for decades, it’s an exciting opportunity to develop the land into an attractive site which will provide ambitious businesses with best-in-class units to grow and expand. “This would expand our footprint on the Tyne Tunnel Trading Estate and add another set of high-quality, easily accessible industrial units to our portfolio.” The development will be built in phases with a first phase of the road infrastructure works and the two drive thru units, which will then be followed by the development of the industrial units in response to demand with units varying in size from 1,820m2 to 7,030m2. Occupiers would also benefit from their close proximity to local amenities such as Silverlink Shopping Park and Tesco Extra. Research by leading property agency Knight Frank, indicates that supply chain disruptions, depleted stock levels and the impetus for greater resilience is driving demand from companies for industrial and logistics property. In addition, a number of online retailers continue to have requirements for facilities to accommodate increased sales volumes and, due to falling vacancy rates, options are extremely limited. Mark Proudlock, Partner at Knight Frank, said: “Rarely have we experienced this level of demand with such little stock to offer. “This development of new units designed to meet the needs of companies seeking to expand, as well as new companies looking to invest in North Tyneside, would be extremely welcome.”

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LabTech agrees deal to sell Victoria House

LabTech has agreed the sale of the 300,000 sq ft Grade-II listed landmark, Victoria House, WC1, to a leading global real estate investor in a transaction valued in excess of £420m. Robert Akkermann, Chief Investment Officer of LabTech, says: “We acquired this building with the vision to transform the iconic landmark into one of the largest and most impressive workplaces in central London. We now believe that it is the optimal time to take advantage of the lack of supply of similar assets in the city.” Eylon Garfunkel, Chief Executive Officer of LabTech, added: “LabTech is a dynamic organization that is constantly reappraising its portfolio to ensure it maximises every opportunity and we are currently looking for new investment opportunities in the UK market.” LabTech’s leading flexible workplace provider LABS will continue to operate 70,000 sq ft in Victoria House for its enterprise clients. LabTech is an international real estate investor and developer, with circa 20 acres of real estate in central London, including Camden Market and the recently opened Camden Market Hawley Wharf mixed-use development in Camden. Victoria House was acquired by LabTech in 2018 for £300m.

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FORWARD FUNDING DEAL COMPLETES FOR NEW 4 STAR MANCHESTER HOTEL

CBRE Investment Management has completed a transaction to provide forward funding investment to RJR Securities for the development of a new 188-bedroom Maldron Hotel on Chapel Street in Manchester City Centre. Dalata Hotel Group plc, the largest hotel operator in Ireland with 45 hotels across the UK and Ireland, has agreed a 35-year lease on the new property to trade under the group’s Maldron Hotel brand. The land was sold by Telereal Trillium, with JLL acting for their team. CBRE acted as funding advisor for RJR Securities, with Gleeds as Development Manager and Squire Patten Boggs as their legal advisors. Avison Young represented CBRE Investment Management. McAleer & Rushe has been appointed as contractor to deliver the new Dalata Maldron Hotel, which will be situated in the Chapel Street/ Embankment Quarter. Currently used as a surface overspill car park by BT, the site will be regenerated into a 17-storey hotel with 188 bedrooms, coffee lounge, bar, restaurant and gym facilities. Richard Peskin, Chairman and majority shareholder of RJR Securities, commented: “I was associated with many interesting development projects during my career at GPE and this one, due to my personal involvement, has certainly been among the most exciting.  Over two years ago we identified this site, being close to Manchester’s luxury and prime leisure core, as an ideal location for a hotel. Now, with the secure forward funding provided by CBRE Investment Management, we are able to fulfil our ambitions.  My thanks go to them, along with the various teams who, in the most trying and complex of circumstances, demonstrated their commitment in getting us over the line with the land acquisition, planning, pre-letting and building contract for this top-class project, which will commence next month”. Shane Casserly, Corporate Development Director at Dalata Hotel Group plc, said; “We are delighted with the confirmation of the funding for our Maldron Hotel on Chapel Street in Manchester City Centre and look forward to construction commencing in the coming weeks. With Clayton Manchester City Centre just opened and a Maldron under development on Charles Street, Manchester is a market that we know well, and view our new hotel on Chapel Street as an ideal addition to our portfolio in the city.” Will Kennon, Executive Director for CBRE, said: “Despite the obvious challenges that the hospitality sector has faced due to Covid, we are witnessing a selected return of investor appetite for the sector, and this project attracted strong fund interest owing to the combination of; undoubted location, indexed lease to the strong financial covenant of Dalata and the first-class project delivery team.” Murray Burdis, Senior Strategy & Disposals Manager for Telereal Trillium, said: “We are delighted to conclude the sale of this surplus car parking site to RJR Securities and their development partners. This ambitious scheme will maximise the site’s potential and continue the regeneration of Chapel St and the wider Deansgate area with renowned hospitality provider Dalata and a new Maldron Hotel. We look forward to seeing the project commence in the coming weeks.” Peter Devlin, Contracts Director at McAleer & Rushe, comments: “We look forward to commencing construction next month and thank the teams at RJR Securities, CBRE Investment Management, Dalata Hotel Group, and all stakeholders involved for entrusting us with the safe delivery of the scheme. This is a credit to our team’s renowned expertise and reliability in delivering quality turnkey hotel developments and adds to our growing portfolio across major cities in the UK.”

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London’s council tax bill hits £5bn, climbing £1.2bn in five years

Research from London lettings and estate agent, Benham and Reeves, has revealed that it’s not just London house prices that have climbed considerably in recent times, with the total paid in council tax by London homeowners and tenants hitting almost £5bn a year – £1.2bn more per year compared to just five years.  Last week it was reported that inflation has surged to a 30 year high and with gas and electricity costs set to climb higher yet, the cost of living has become increasingly difficult for many.  Those living in London already face some of the highest house prices and rental values in the nation, with the capital also home to the highest household expenditure and this squeeze on affordability has no different when it comes to the amount of council tax they pay.  Household council tax costs The research by Benham and Reeves shows that the average Londoner pays £1,374 in council tax per year, up 26.8% in the last five years,  Richmond is home to the highest council tax cost per property at £2,065 per year while Southwark has seen the largest increase over the last five years at 36.8%.  Total council tax costs In total, London’s current council tax bill is a huge £4,993,798,878 per year based on the average cost per household and the total number of dwellings across the capital.  Barnet is home to the highest sum of council tax paid on an annual basis, with £258.5m paid across the 146,730 homes in the borough. Croydon is also home to one of the highest total council tax bills at £252m per year, followed by Bromley (£225m), Ealing (£195m) and Lambeth (£1782m).   But it’s not just the increasing cost of council tax per household that is pushing up this total, in the last five years an additional 150,000 homes have been built within London which has contributed to a £1.2bn increase in the total sum of council tax paid across London.  Tower Hamlets has seen the largest annual increase in council tax costs over the last five years, with the total sum paid per year increasing by 48.6%. Southwark (45%), Barking and Dagenham (41.4%), Lewisham (41%) and Croydon (38.9%) are also amongst the boroughs to have seen the largest uplofts in the total sum of council tax paid.  Director of Benham and Reeves, Marc von Grundherr, commented: “Council tax is one of the core costs that many homebuyers fail to consider when looking to buy a home and the sum owed each year can differ drastically depending on where you choose to live.  Much like our home insurance or energy bills, it’s also subject to change and the average London homeowner has seen council tax bill increases squeeze their cost of living by a further £300 a year in the last five years alone. So it’s an important one to consider when it comes to the ongoing affordability of your home, as unlike an expensive phone contract or comprehensive TV package, it can’t be dodged.” Data on council tax costs per dwelling sourced from Gov.uk: Live tables on council tax Data on total dwellings in each borough sourced from Gov.uk: Live tables on dwellingsTotal council tax bill and change based on the current average cost of council tax per dwelling (2021/22) multiplied by the total number of dwellings vs five years previous (2016/17)

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Lismore’s review highlights positive Scottish investment market during 2021 with total volumes up 24% from 2020

Alternatives market rebounds strongly and ESG continues to drive pricing Leading independent property advisory firm, Lismore Real Estate Advisors today released its comprehensive review of the Scottish investment market for the final quarter of 2021 and predictions for 2022. Despite the ups and downs faced during 2021, the Scottish investment market has fared surprisingly well with investment volumes trading at circa £1.345bn, a 24% increase on the total for 2020. The emergence of the Omicron variant and the return of restrictions continues to bring challenges across the entire property market and global economy but quarter 4 trading remained strong at £520m, up 27% on Q4 2020. Key transactions included the £32.2m sale of Sainsbury’s at Inglis Green Road, Edinburgh by Inglis Property LLP to Urbium Capital Partners LLP, the off-market sale of Scania at Eurocentral by West Ranga Property Group to DVS Property for £10.725m and the £58m sale of Exchange Place One in Edinburgh to CBRE Investment Management. Chris Macfarlane, Director of Lismore comments: “The wall of overseas capital chasing stock continues and pricing reached pre-pandemic levels in the food stores, logistics and retail warehousing sectors. However, challenges remaining for significant parts of in-town retail/leisure and investors continue to grapple with offices, other than those of the very best quality or which can be adapted to meet more challenging ESG credentials. “When looking at market themes, one part of the market which was hit hard initially but which has rebounded (in part) very strongly is the alternatives sector, covering PBSA, management contract hotels and serviced apartments. The strongest, well-located assets have seen occupancy levels recover and while net operating income might not be quite back, investor interest has been stirred by their resilient qualities. “In terms of pricing, foodstores, convenience stores and distribution have seen the strongest sharpening of yields of between 50-100bps over the quarter. Core-plus opportunities have been relatively limited but we are seeing a softening of pricing around Grade B offices as investors come to terms with increasing levels of capex and ESG challenges. The only sector really offering “value-add” pricing is the shopping centre market where risk remains but the best assets are starting to find their level, at between 50-90% discount to purchase levels. “UK institutional activity remains very focused on longer income defensive stock including retail warehousing and distribution, although we have seen a welcome return by an institution to the Edinburgh office market for the first time in a number of years. “Overseas investors continue to target Scotland (Edinburgh in particular), with buyers from the Middle East and mainland Europe all remaining active but the overwhelming weight of capital has been from North America. The level of distressed selling continues to be very limited with the more opportunistic buyers looking further up the risk curve, either direct development, vacant buildings or shopping centres.” With a seemingly brighter 2022 looming, the latest investor research undertaken by Lismore predicts that the top three performing sectors in 2022 will be retail warehousing (36%), distribution (28%) and multi-let industrials (17%). Although prime yields have begun to harden, retail warehousing still offers some good value given the rapidly changing retail market and strong occupational demand. The support for foodstores has fallen significantly (6%), perhaps an acknowledgment that a lot of the performance in the sector has come during 2021. The office sector was the most poorly backed by respondents, with concerns over capex requirements and future working habits being mentioned as headwinds for the sector. A significant majority (69%) of respondents in Lismore’s research expect to be net buyers in 2022, with 21% neutral. Investment managers and property companies look to be most acquisitive with 83% and 73% respectively anticipating they will be net buyers in 2022. Just over 50% of funds and private equity respondents expect to be net buyers. Only 10% of respondents expect to be net sellers, suggesting another year of limited stock and inevitable pricing pressures for the best opportunities. The Lismore review also features an in-depth interview with James Dunne, Head of UK Transactions at abrdn, who comments: “The pandemic has highlighted the benefits of having a diversity of income and sectors within a portfolio. The breadth of the alternative sectors provides an increasingly significant part of the real estate investment market, with the hotel sector offers an interesting pattern in durability. However, this recovery trend has been narrow and will continue to be driven by the best assets and the best locations significantly outperforming the market. “The extended stay market (apart-hotels and serviced apartments) was already growing and the ability to pivot from more lucrative short term stays to a longer term model provided certainty of income and meant that the sector showed very strong resilience throughout the worst of the pandemic and therefore a strong rationale to invest both for the protection in the downside but also the predicted performance in a more normal market. “We are still in the early stages of the attitudinal transformation of real estate from providing space as a product to embracing space as a service. The most visible area where we have seen an ongoing shift to a more service real estate environment is the office sector. This has been accelerated and is an area that could continue to develop rapidly with the long term return to the office. The retail sector will have to continue to adapt if it is to stay relevant to the demands of consumers and offer more experiential retail, most likely digitally enabled to lead a partial, targeted recovery in the sector. “The one thing we can be sure of is that the evolution of how real estate is used and provided and the increased ‘hotelisation’ of all sectors will continue apace over the next few years and we as investors have to continue to not only adapt to but drive forward.” The full Lismore Quarterly Review is available to download from: HERE

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