Birmingham ranks 7th in regional property investment league table

Birmingham has ranked seventh out of a list of ten regional locations for property investment, according to new research by Morton Fraser. 

Research amongst British property investors by the law firm’s commercial real estate division ranks a list of ten British cities according to their attractiveness as investment options. Edinburgh (+24), Bristol (+21) and Manchester (+4) are the most attractive destinations for investors – more found them attractive propositions than those who did not.

However, Birmingham did not appeal to the majority of investors, with more rating the city an unattractive investment proposition rather than an appealing one.

Rank City  Attractive (%)   Not Attractive (%)  Net Investment Score
 1  Edinburgh  52  28  + 24
 2  Bristol  48  27  + 21
 3  Manchester  40  37  + 4
 4  Leeds  31  42  – 11
 5  Cardiff  31  45  – 14
 6  Glasgow  30  46  – 16
 7  Birmingham  26  47  – 21
 8  Newcastle  21 50   – 29
 9  Dundee  17  50  – 33
 10  Aberdeen  16  56  – 40

Aberdeen is rated the least attractive location for property investors. This comes after its energy-dependent economy was hit by falling oil prices, leading to thousands of job losses and the contraction of the oil & gas industry.

David Stewart, commercial real estate partner at Morton Fraser, said:

“The top cities in our league table have demonstrated real economic resilience since the recession. Their success in protecting inward investment, attracting business and talent, and developing infrastructure means property investors can more easily envisage long-term gains.

“Regional commercial property investment has a lower upfront capital cost but can often return higher yields and longer tenant leases, improving income security. However, those benefits are outweighed by perceived economic risks in most regional cities by potential investors.”

According to Morton Fraser, Leeds, Cardiff and Glasgow will all expect to move into a net positive investment score in the coming year after at least 30 per cent of investors felt they were attractive locations. They have also negotiated city region deals with the UK Government collectively worth at least £3bn. 

David Stewart added:

“Demand for equity stakes in commercial property vehicles has increased in recent years as investors seek value and flexibility in the asset class. City region devolution will play a key role in ensuring investors see regional locations as positive income-generating opportunities.

“That said, experience shows that a good property investment can withstand economic fluctuations and the right opportunities can be found in all these locations.”

 

 

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