Upbeat Trend In Property Market
10 October 2011Despite challenging times, it is encouraging to witness the in-flow of institutional investors and property funds back into the local market over the past year. Granted investment activity has been lower than in previous years, however, deals such as La Salle Investment Management’s acquisition of Braidwater Retail Park, Ballymena, the sale of Longwood Retail Park, Newtownabbey to Scottish Widows Investment Partnership and that of Marks & Spencer’s store, Donegall Place, Belfast show the market gaining some momentum. Over the course of this year, we have negotiated a number of significant deals involving local and institutional investors including the acquisition of a Tesco food store in Bristol, a prime retail unit in Glasgow’s Argyle Street and the forward purchase of a substantial mixed-use development scheme in the UK.
As 2012 approaches, the greatest challenge for the property market will be attracting new sources of funds for investment, particularly in the case of local investors. This is not to say that local investors have withdrawn altogether from the market. On the contrary, they are still seeking investment opportunities albeit principally up to circa £1-2 million. Cash buyers are also actively engaged in identifying suitable opportunities as property undeniably still yields a better return compared to other asset classes, in particular, properties with a good location offering secure income.
Our recent re-entry into the auction process goes some way towards proving this thesis with an astonishing 93% of the properties in the auction catalogue going under the hammer as bidders vied to secure commercial and residential properties with maximum reserve prices ranging in value from £40,000 to £175,000. Obviously, we have been encouraged greatly by these results and are hoping to replicate them at our upcoming auction, which is scheduled for the 8th of December.
We are far from emerging from global recession, however, and can only hope that the general economy begins to pick up sooner rather than later, as this is the only thing guaranteed to have a positive and lasting impact upon the property market across Britain and Ireland.