appetite ‘is returning’

Rob Hepworth
Rob Hepworth
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A clutch of transactions in recent months suggest investor ‘appetite’ has returned to regional centres including Sheffield, according to commercial property experts.

Commenting on the investment market in the last six months of the year, Rob Hepworth, associate at the Sheffield office of Knight Frank, said: “2013 proved to be a watershed year for UK commercial property as the economic recovery draws more investors off the sidelines. As well as demand picking up, we are also seeing a change in what stock is in demand, with regional offices and industrial back on investors’ shopping lists.

“Recent transactions towards the end of 2013 highlight that investor appetite has returned. A selection of the year’s notable regional deals includes the 6,096 sq ft retail unit with ancillary office space above on Fargate. Home to current tenant O2, the building was sold by vendor M&G Real Estate to a private investor in November for £1,650,000.”

Another November highlight was the sale of Unit 8 Broadfields Business Park, for £865,000. Sold by vendor JF Finnegan/Primesite to a private investor for whom Knight Frank purchased the adjacent unit in December 2012, and which is also let to current tenant Synectics, the 5,642 sq ft building offers a NIY of 9.6 per cent.

Rob said: “6.9 per cent represents the long term average prime yield for regional offices as a whole, although the flexible nature of most leases 
currently being signed mean that there are very few ‘prime’ opportunities for buyers currently in the market to test this. 
Prime regional yields are thus currently stronger than their long-term average.”