Now is the time to be bold, conference hears

Business Leader Magazine attended DTZ’s Annual Outlook 2014 event this morning.

At the conference, attended by over 100 business leaders, DTZ Research published its 2014 Annual Outlook report, highlighting that economic growth has picked up and the UK macro outlook has improved.

The findings were presented at The Bristol Hotel in Bristol city centre. Following presentations about the UK economy and property market going forward, there was a panel debate.

Speakers revealed the outlook for the regions is much brighter than in recent years with economic growth in the regions forecast to increase by 2.8% in 2014, and 3% over the medium term whilst employment is forecast to increase by 400,000 over the next two years.

Job gains will be underpinned by business services, TMT and retail, offsetting the ongoing contraction of the public sector.

As a result, occupier sentiment and demand for commercial property is generally strengthening.

Attendees also heard that take-up is growing across the regions but availability, particularly for Grade A office and industrial space, is falling rapidly.

Investor appetite for commercial property assets is also increasing and volumes have risen markedly, the conference heard.

Richard Yorke, UK Head of Research at DTZ and co-author of the report comments: “Based on its relative attractiveness, investors’ appetite for commercial real estate is very strong.

“This is further helped by a normalisation of the lending markets. But, investors should take advantage of current pricing quickly before interest rates rise.

“At the same time, prime opportunities have become less attractive. Consequently, investors need to consider secondary assets and locations more closely, which are still attractively priced.

“Investors need to be bold and move quickly to take advantage of this limited time opportunity.”

Nick Allan, Senior Director in DTZ’s Bristol investment team comments: “The turnaround in investment market has been dramatic, especially over the past 12 months.

“This has been driven by the huge weight of money seeking exposure to UK investment markets from domestic investors and, more significantly, a wide range of international investors.

“The UK is a core commercial property market, and one of the most robust in the world, but investors are also attracted to the encouraging signs of improvement within the UK economy ahead of other international markets and economies.”

Regarding Bristol more specfically Nick concludes:“A number of recent deals in city have demonstrated the speed at which the market has corrected, including the acquisition of Portwall Place for £51.5m (6.91%) by the World’s largest investment manager, BlackRock and Aprirose acquisition on behalf of South American clients of Parkgate, Aztec West for £17.8m (6.98%).”