Commercial property investment hits two year high

New figures released by Lambert Smith Hampton (LSH) have revealed that commercial property investment in the UK saw its highest level of activity for two years in the second quarter of this year.

The LSH study revealed that UK investment totalled £8.3 billion during the period with 15 deals worth more than £100 million completed, accounting for £3 billion of the total.

The largest deal in the region was Development Securities’ purchase of the MEN Arena in Manchester for £62.2 million. Other key transactions included Braemar Group’s acquisition of the freehold of Manchester's Beetham Tower.

The LSH research also showed that overseas investors have replaced UK institutions as the most active investors in UK commercial property, accounting for nine of the top 20 positions in LSH’s most active buyers index.

The largest transaction in the second quarter was the £580 million purchase of the Knightsbridge Estate by the Saudi Arabian investor Olayan Group, from Avestus Capital Partners, representing a four per cent net initial yield.

Ezra Nahome, chief executive of LSH, said, “The market has become more broadly based in recent months with renewed buying activity from several sources that have been out of the market for some time.

“The greater variation of buyers must bode well for the coming months, in what we believe will be a more challenging market.”

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