The rise of the retail real estate market in northern England
With nearly half a billion pounds of investment in twelve months, Olswang's leading real estate team has been busy buying and selling shopping centres in cities across the north of England, proving that contrary to popular belief there is a continuing appetite in the retail real estate market in the north of England, thanks to responsible investment.
Over the past fourteen months, the UK press have painted a depressing picture of retail, and by association, the state of the real estate market across the north. With statistics calculating a 14%[1] vacancy rate in town centres, few saw beyond the gloom to the opportunities available for investors prepared to invest in properties across the north of England.
Although many high street retailers like Thomas Cook, Dixons, HMV and Top Shop are closing down stores by the dozens across the UK - for example, billionaire Sir Phillip Green has recently announced his intention to close up to 260 outlets by the end of 2012 - discount shops such as Poundland and Home Bargains have managed to slip under the recession radar. Olswang has found that of the fourteen shopping centres it has acquired managed and disposed of for its clients over the past year, approximately 80% of tenants fell within the discount sector category of retail business.
"The key is responsible investment," comments Catherine Maxwell Senior Associate in Olswang's Real Estate group. "The recession has had a real impact on purchasers as they look to invest in long-term high yielding opportunities that they can continue to develop into fortified, recession proof portfolios. The investor clients that we're working with are seeking out alternatives to the traditional investment property model. As such, we work along side our clients steering them through rigorous due diligence to assess the financial health of the retail businesses within the target asset. Investing "front end" time and financial resources helps to ensure the longevity of our clients' investments."
With market leading asset managers such as F&C Reit Asset Management, Capital & Regional, Cornerstone Real Estate Advisers Europe and Aberdeen Property Investors buying on behalf of their clients, has the north of England become one of the best kept real estate secrets in the country? In Liverpool, for example, a recently purchased shopping centre scheme comprising some 130 plus retail businesses could boast only five empty shops units in the middle of one of the most unyielding recessions in modern times, making the centre a truly desirable property asset for investors looking for high yields.
Olswang Real Estate partner Tim Westhead comments: "We're working with very sophisticated national and international investors who are looking for targeted opportunities. We've found that by providing them with a 360° approach to managing these assets our clients are able to retain and protect the profitability and market value of these shopping centres."
Tim continues, "the knock-on effects of responsible investment can be to boost local economies which of course can curry favour with town councils, bolster employment and community engagement and even the residential property market".
Olswang's take on 'responsible investment' has resulted in the successful purchasing and management of shopping centres throughout the north of England including centres in Liverpool, Accrington, Middlesbrough, Barnsley, and Burnley with an average purchasing price of £45 million.
Olswang's approach to their role, their giving of unique and unabashed commercial advice to clients, and looking after the long-term life cycle of each investment by implementing their client's active management programmes, has meant that their clients' property assets remain strong performing investments in what continues to be a challenging financial market.
For more information on Olswang's marketing leading Real Estate team please visit www.Olswang.com/expertise.
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[1] British Property Federation - press release & stats
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