Member Article

Confidence returns to Yorkshire’s commercial property market

After four challenging and difficult years in the commercial property market in Yorkshire, confidence is returning to all sectors in the market across the county, according to James Appleton-Metcalfe, Managing Director of Citivale, the Leeds-based property developers and asset managers

Mr Appleton-Metcalfe commented: “It is not boom time quite yet, but the days of bust are well and truly behind us. Don’t just take my word for it – recent statistics released by national property consultancies Knight Frank and Lambert Smith Hampton graphically underline the progress that has been made this year, following the dark days of the recession”

Lambert Smith Hampton’s UK Investment Transactions Report revealed that investment in Yorkshire’s commercial property market had reached its highest level since 2010 – up 91% to £354.83 million. Even more tellingly, the county had secured record investment growth in the three months to the end of September – a huge surge on the second quarter and up 18% on the third quarter.

Year-to-date commercial property deals in Yorkshire now stand at more than £1.01 billion with the retail sector experiencing the largest growth, accounting for 67.5% of total investment at £239.54 million.

Meanwhile the logistics and industrial property market in Yorkshire, right across the county from the North Yorkshire to South Yorkshire, from West Yorkshire to the Humber is gathering momentum, with speculative development making a long-awaited return to the region, according to the latest research from global property consultancy Knight Frank. The return of speculative development will provide a much needed boost to the quality of supply in the region, and Knight Frank believes other development sites will come forward as this momentum gathers pace.

Mr Appleton-Metcalfe said: “For example, my own company Citivale, based in Leeds, has just acquired the 86-acre Humber Enterprise Park in Brough, East Yorkshire from BAE Systems in conjunction with Lumina Real Estate Capital The park includes 1.3 million sq ft of office and industrial space, 20 acres of development land and benefits from Enterprise Zone and Assisted Area Status which offers significant incentives to attract new occupiers. We look forward to developing and refurbishing an historic site, confident that the burgeoning market will support us”.

Meanwhile the office market, especially in Leeds and Sheffield, is also recovering from the difficult recent years. According to Knight Frank’s latest Regional Offices Market Presentation (ROMP) report, Grade A rents are now approaching £26 per sq ft, their highest for five years. This reflects not just a shortage of quality stock, but also a surge in confidence.

It should also lead to a return to serious speculative development and now the Leeds city skyline is welcoming back cranes. Recent deals such as the acquisitions of Yorkshire House and City One, the biggest development site in the city, underpin this optimism. In Sheffield, CTP’s development of 3 St Paul’s Place, the first speculative office building in the city since the recession, mirrors the buoyancy of Leeds.

He added: “It would be foolish to be over-confident with the upcoming General Election and a possible interest rate rise on the horizon. But, given the dreadful battering the commercial property market has taken in Yorkshire, and across the UK, since the credit crunch, the revival in confidence in the market this year should be warmly welcomed”.

This was posted in Bdaily's Members' News section by Robert Beaumont .