New data has shown that demand for commercial property has risen in the North-West of England. Property expert Simon Morris asks what this could mean for investors who are considering investing in this up and coming market.
The growth of the UK commercial property market
Data indicates that the UK has recovered from the Great Recession. The BBC’s GDP tracker shows that the UK bounced back from economic decline in 2012 to grow by 1.7% in 2013 and 2.6% in 2014.
This has spurred a reversal of fortunes for the UK’s commercial property market, allowing it to record returns of over 10% for investors in 2014. Many experts have assumed that most of the growth in the commercial property market has been centred on London. The UK capital is the country’s economic hub, which allowed it to register record office rents in the first quarter of 2015.
More interest in North-West office space
Yet new data from the Royal Institution of Chartered Surveyors (RICS) has shown that London’s isn’t the only commercial property market to benefit from the economic recovery. RICS’ latest Commercial Market Survey showed that 38% respondents in the North-West of England saw more prospective interest in their office space in the first quarter of 2015 than the quarter before.
Demand for commercial property in the North-West has risen steadily since the height of the recession at the end of 2012. However The Liverpool echo has reported that 22% more surveyors in the North-West said that they’ve seen a fall in the availability of commercial space in the same period, whilst nearly a quarter admitted that they expect rents to rise rather than fall in the next quarter of 2015.
What does this mean for investors?
This could be good news for investors. The London commercial property market is notoriously hard to crack. It’s extremely lucrative but an investor needs to put aside a hefty sum of capital to enter it.
The regional commercial property sectors could provide investors with cheap alternatives to London that look like they might become more profitable over the course of 2015. This doesn’t necessarily mean that potential investors should flock to regional commercial markets. As Simon Morris advised in his free property investment guide for 2015, investors should research a wide range of financial products before they invest.