Private wealth brings commercial property cash to Yorkshire

Private wealth brings commercial property cash to Yorkshire

Private wealth investors account for 25% of global commercial property investment volumes, investing $902 billion into the sector since 2009, according to Knight Frank’s latest Wealth Report.

Private Wealth investors have become far more sophisticated and considered, and are not just ‘hunting’ for trophy assets – they view commercial property as tangible, controllable, not subject to daily pricing and giving real performance relative to other asset classes. 

Rebecca Farnsworth, investment partner at Knight Frank in Leeds, said that private investors were attracted to Yorkshire.

Recent transactions include The Old Post Office in City Square, Leeds, which was sold for millions to a private UK investor, and No 35 Stonegate in York, let to Oliver Bonas and previously owned by astrologer Jonathan Cainer, which was bought by a West Yorkshire businessman for £1.9m.

Rebecca commented: “The strength of Yorkshire as a commercial property region is good, especially Leeds, which attracts a lot of inward investment. It’s not just fund managers, but wealthy individuals who look at commercial property to fund their pensions.”

In 2015 a total of $178 billion was invested, with $52 billion in Europe and $16 billion in the UK alone – three times more than seen in France and a third more than in Germany. Hotels led the way as the most popular sector for investment, being a well understood market for Middle Eastern and Asian Private Wealth.

Moving forward Private Wealth investment will continue to thrive, with 23% of Knight Frank’s Attitude Survey participants maintaining that there will be a large increase of commercial property allocation over the next ten years.

Lee Elliott, head of commercial research at Knight Frank, commented: “Private investors are now well established as a bed-rock of the commercial real estate market. We expect private investors to develop stronger infrastructure and more diverse strategies as they participate in a hugely competitive marketplace.”