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East of England CRE investment soars

By Paul Norman - Monday, February 12, 2018 10:37

Commercial investment volumes in the East of England reached £1.8bn during 2017, the strongest year since 2005 and 50% above the 10 year average, reports Savills.

One of the key drivers was the industrial market, which accounted for 28% of the total, amounting to a record £499m.

Savills notes that there has been significant interest in the industrial sector, which has seen investment volumes exceed office totals in the region for the second consecutive year. However, despite record levels, the largest individual contributor was the retail sector, totalling £696m of investment. This was largely due to the Greater Manchester Pension Fund’s (GMPF) purchase of Intu Chapelfield, Norwich for £148m, which was the largest deal in the region last year.

Other key deals across the East of England in 2017 include Pigeon Investment Management’s sale of the Anglian Water Services headquarters in Thorpewood, Peterborough for £13.95m to an overseas investor, Legal and General’s purchase of Bar Hill Industrial Estate for £11.6m, Schroders purchase of The Quorum, Cambridge for £22.7m and Tesco Pension Fund’s purchase of the Abcam HQ on Cambridge Biomedical Campus for over £60m. Elsewhere in the region, other smaller transactions included Aviva selling Grafton Place Industrial Estate, Chelmsford to TH Real Estate for £5.95m and Benefit Cosmetic’s Headquarters in Chelmsford selling to a private investor for £4.1m.

Last year marked the return of the UK institutions into the East of England, with investment reaching £808m, which Savills calculates as 45% of the market. Overseas investors also remained active, accounting for £321m, 18% of the market total, as they continue to familiarise themselves with regional markets outside of central London.

James Emans, director in the investment team at Savills, said: “The eastern region has seen a significant uptick in investment volumes across all sectors as investors continue to chase income yield and growth opportunities. What’s more, assets are attracting multiple bids from a range of investor types. As a result we are aware of approximately £1.5bn of unallocated capital looking to invest into the Eastern Region and for this reason, we anticipate further benchmark transactions in 2018.”

Savills office and industrial investment teams have advised on 24 investment transactions in the East of England in 2017 equating to £303m in asset value.

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