With London reaching saturation point, investors are now turning their attention to new growth hotspots across the country. Regional activity is now a key focus. Government-led transport projects and digital infrastructure investment are the biggest investment stimuli.
Commitments around the Northern Powerhouse and Midlands Engine appear to have resonated across the sector. Investors expect the North West, West Midlands and East Midlands to deliver the biggest commercial gains over the next five years.
The North, and in particular Manchester, is seen as a viable investment alternative to London and the South East. Further devolved powers and planned infrastructure projects across the North will help boast productive and only enhance this investment offering
Says Ian Taylor, Real Estate lead partner for the North West.
Government-led northshoring has created further opportunities for sustainable returns. The Cabinet Office recently set out plans to lease 378,000 sq ft of office space in Leeds – the biggest ever commercial property letting in the city. It is one of up to 22 strategic hubs planned across the country.
Investors expect the South West, South East and East of England to generate stand-out residential returns in the next five years. London's untethered property prices have forced swathes of people into surrounding areas. Many now leapfrog the commuter belt to drive demand in towns and cities further afield.
Bristol has become a growth hot spot. A survey by Knight Frank at the start of the year showed the city ranked third for residential price growth in Europe. While demand has slowed in recent months, long-term prospects remain strong.
Families and young people chasing a better work/life balance will help sustain resident interest outside London. This in turn will stimulate investment in commercial property in those areas. We’re already seeing professional service firms expand and race to meet demand in locations such as Exeter and Bristol. The UK moves another step beyond its London-centric past.