As estate agents, we know that the investments in new homes in Birmingham are increasing. Recently we have also know that transactions in commercial property hit £845 million in 2015 due to the fact that the city is attracting more interest and investors. It is a new record and means almost double the five-year average.
The biggest percentage of the investment was in offices sales, a 76%, with £641 million from 25 deals, a 2% more than in the previous year's tally of £626 million, according to research by the CoStar Group.
Commercial real estate investments reached the amount of £67.5 billion, which is a 5% less than the record of £70.7 billion hit in 2014. However, 2015 has been the second strongest year in this kind of investment, with a 46% above the ten-year average.
Last year there were very important commercial property deals in Birmingham city centre, such as the acquisition of Colmore Plaza for £138.3 million by Ashby Capital or the purchase of 1 Colmore Square for £87.3 million by Legal & General.
The truth is that Birmingham is becoming more and more attractive for banks. A proof of this is Deutsche Bank’s back office move to Birmingham. HSBC has also announced their plans to relocate its retail operations from London to Birmingham.
According to the real estate analyst at CoStar Marianne Fitzpatrick, international investors are looking for value outside of London and the city of Birmingham is in a great moment thanks to the regeneration of its infrastructures.
As examples of this regeneration are New Street Station, the tram lines, which has been extended, and the plan to build the HS2 railway link to London. In addition, London has become more and more expensive, which has moved the attention from the capital to other cities such as Birmingham.
The county of West Midlands had also a rise of 6% in commercial property investment, with £2.66 billion in transactions in 2015.
The volume of investments in the office sector in West Midlands is higher than in other sectors, with a 31% of the total volume invested at £822 million, according to the UK Investment Transactions report created by the consultancy Lambert Smith Hampton. The second most important is retail, accounted for nearly 28%, which means £744 million of acquisitions.
In third position, the industrial sector reached the figure of £453 million, a 17%. Other sectors accounted for £645 million of transactions.
In total, the report shows that 2015 was a great year, being the performance a 54% above the five-year average and a 49% above the region's ten-year average. One of the most valuable deals in the region was the sale of the NEC for £307 million to LDC.
