Retail properties in some of London’s most desirable locations, such as Oxford Street and Piccadilly Circus, are overpriced by as much as 20 per cent, expert DTZ warns.
According to telegraph.co.uk, the agent states that retail properties in Manchester and Leeds now offer much better investment returns that units in the centre of London. Leeds in particular is expected to see the highest rental growth and price increases for industrial property – which includes factories and warehouses.
Currently, industrial sites are around 14 per cent below their fair market value and Manchester retail properties values are lagging behind by 13.4 per cent. Although British commercial property prices are on the up, the Bank of England (BoE) still predicts that values are 37 per cent below levels seen before the financial crisis.
Richard Yorke, head of UK research at the property company, says demand for assets outside the capital will boom next year, due to the forecasted rise in interest rates and improving returns from tenants.
“A strengthening recovery in the UK economy provides the backdrop for rental uplift and we expect investor demand to remain buoyant in the near term, with buyers continuing to look for opportunities outside London,” he explains, reports cityam.com. “However with interest rates likely to rise in 2015, pushing bond yields higher, prime property will look less attractive in comparison.”
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