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MAJOR PROPERTY INVESTMENT DEALS REMAIN CONFINED TO BRISTOL, SAYS KING STURGE

Growth in £5m-plus transactions has yet to spread to Exeter and Plymouth

The prime property investment market is on a growth curve in Bristol – but it has yet to get off the ground in Exeter and Plymouth, according to an industry expert.

Simon Bennett, partner in the investment team at international property consultants King Sturge, says that the number of major transactions involving big institutions has shown signs of marked recovery in the prime markets in recent months.

But he says deals in the £5 million-plus bracket have been limited to the major cities.

“There are now examples of buildings in Bristol where we have seen big increases in value not yet seen elsewhere in the region,” he said.

The Sainsburys distribution unit at Emersons Green, Bristol islet for a further 15 years and was sold at 8.2 per cent in April 2009. The John Lewis distribution unit at Avonmouth is currently under offer at circa 6.25 per cent for a new 15-year lease. This shows a 25 per cent uplift in value over the last six months.”

“There is real upward price movement for the best quality properties and this is being dictated by big institutions. So far we are only seeing this phenomenon in Bristol, in part simply because there are fewer big buildings in centres like Exeter and Plymouth.”

Mr Bennett says commercial property owners need to remain innovative in the current market.

“Rental growth predictions make difficult reading so landlords need to work out how to make their assets perform for them.

“This means talking to tenants about their requirements – for example do they need more or less space, or improvements such as air conditioning - and looking at whether there is any value to be drawn out of lease re-structuring. This can provide monetary benefits for both landlords and tenants.”

ENDS  2nd December 2009

For further information please contact Neil Fraser, Sturgess Van Damme, on 01275 349011 or email neil@sturgessvandamme.co.uk