Leeds has secured £3.7 billion of commercial property investment in the past decade, ranking as the 5th UK city outside of London for attracting investment, according to global property adviser, CBRE.
As part of a recent report, ‘Core Cities, Core Strengths’, CBRE shows that in total £44.4 billion was invested across the 12 cities analysed in the report, the first of its kind to compile this level of detail. While Manchester took the number one spot in terms of volume, Leeds and Glasgow along with four smaller cities (Aberdeen, Edinburgh, Cardiff, and Bristol) perform better in this per capita ranking than Manchester and Birmingham.
The report identifies the key factors behind a city’s success: civic leadership, talent in growing sectors, quality of life and ‘placemaking’, and infrastructure, provides a detailed review of the main city property markets outside London, and explores the opportunities and risks of devolution. It also includes ‘softer’ indicators such as the number of 5 star hotels or Michelin star restaurants.
In total, the regions beyond London and the South East account for almost 60 per cent of all UK commercial real estate transactions. The findings show that investors have diversified their property holdings as part of the recent economic recovery with emerging investment sectors such as healthcare and student housing increasing their share of the market. Prior to the financial crisis, these assets accounted for 3 per cent of investment; this has trebled to around 10 per cent of total investment volumes today.
Overseas investment into the regions has also reached its highest level since 2007, with the first nine months of 2015 seeing twice as much investment as in the whole of 2013. Political support has helped this growth, with Prime Minister David Cameron referring prominently to the ‘Northern Powerhouse’ concept during a recent visit to China, and President Xi’s visit to Manchester during his own visit to the UK.
The report highlights Yorkshire as the region which is fast becoming an attractive retail destination. It notes that Leeds, with its compact city centre, is a great example of a northern city that has undergone a process of regeneration in recent years. With over 1,000 shops, Leeds is attracting increasing numbers of visitors each year. Since the launch of Trinity Leeds in 2013, retail performance in the city has gone from strength to strength and, according to Javelin Group, the city is now the third top retail location outside of London, only behind Manchester and Glasgow.
CBRE states that Trinity Leeds, with its eclectic mix of retail and food and beverage, has seen an 18 per cent growth in total sales in the 18 months to September 2015, commenting that the retail offer in the city is set to improve further. The Victoria Quarter, which already boasts a number of luxury retailers, including the first Harvey Nichols store ever to open outside of London, will soon be linked with the new Victoria Gate scheme which is due to open in 2016. This new development will deliver over 1 million square foot of retail and restaurant space including the arrival of a flagship John Lewis store which will ultimately strengthen Leeds’ position as a top retail destination.
Bradford’s retail scene is also said to be set to reap the rewards from regeneration. Bradford Broadfield, Westfield’s latest UK shopping centre development is predicted to increase footfall in the city by 40 per cent. During the first four days of trading in early November over 250,000 people visited the new shopping centre. The £260 million landmark scheme has added 570,000 sq ft of retail space to the city comprising over 70 shops, restaurants and cafés.
Alex Whiting, senior director of Capital Markets at CBRE’s Leeds office said: “Investor interest in Leeds is buoyant at present and we are seeing increasing numbers of overseas investors looking at commercial property in the city. North American and European Investors are leading the way although we are seeing interest from the far east and middle east. The Canadian Pension Plan Investment Board recently formed a joint venture with Hermes Real Estate to development the £200m Wellington Place office scheme in central Leeds.”