Office investment in the UK’s six major regional cities hit £2.9bn in 2017 – up 49% year-on-year and the highest in a decade, according to JLL.
Manchester accounted for close to one-third of the investment with £908m invested in the city’s offices.
Birmingham, Glasgow and Edinburgh all achieved highest volumes on record last year, with Birmingham coming second overall with £762m of investment.
There were 15 deals of more than £50m in the six cities last year, accounting for 55% of the overall volume in those markets. The largest was the £260m acquisition of Brindleyplace in Birmingham by HSCB Alternative Investments.
Overseas investors – who accounted for 48% of all investment in the six cities – were drawn to the larger lot sizes, with 64% of offices of more than £50m involving overseas capital.
UK investors, meanwhile, doubled the number of acquisitions they made, year-on-year.
James Porteous, director of JLL’s capital markets team, said: “The availability of suitable product will remain thin with motivated sellers in short supply. Demand for ‘risk on’ assets will remain tempered against the backdrop of Brexit negotiations. Polarisation between prime and secondary pricing is undoubtedly increasing, and our advice to investors is to choose carefully in secondary markets.”
Office take-up was also up 20%, year-on-year, in the six major cities at 5.6m sq ft. The public sector accounted for 29%, led by significant deals such as the GPU’s acquisition of 378,000 sq ft at Wellington Place in Leeds.
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