SW real estate investment volumes rise by 23% to £1.5bn in 2014

New data released by leading property consultancy JLL shows that direct real estate investment in the South West hit £1.5bn in 2014, up 23 per cent on the previous year, and accounted for 5.3 per cent of all direct real estate investment into the UK regions in 2014.

This figure included TIAA Henderson Real Estate's acquisition of Land Securities’ 50 per cent stake in Princesshay Shopping Centre in a deal worth £127.9 million, the single largest transaction in the region in 2014.

Looking ahead, there are many big investment projects already in the pipeline in Exeter, including Princesshay Leisure, the plans for which are expected later this year, and the redevelopment of the Guildhall Shopping Centre, Matford Green Business Park, the £97 million Met Office supercomputer, Sky Park and the Science Park.

According to Will Dale, associate director in JLL’s Exeter office, the city has a good reason to be optimistic about the future. He says: “As yields on high quality commercial investments have reduced, investors are now looking beyond London and the big cities for value opportunities.

“Improving economic conditions, low borrowing costs, increasing occupier confidence and reducing levels of quality second hand stock will put pressure on Exeter’s property market, and the capital performance of commercial property investments will be further enhanced if, as expected, these tailwinds translate into rental growth.”

Direct real estate investment in the UK hit a record £65 billion in 2014, 3% higher than the pre-recession peak in 2006 and 16% higher than 2013’s total of £55 billion. The UK is the second largest commercial property market in the world, and now accounts for 18% of all global transactions.

One of the major drivers of growth in UK investment volumes was capital flows into the UK regions, which hit £28bn, a 70% rise from the previous year and the highest on record.