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Leeds retail market offers ‘best value’ for investors

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13 Aug 2015

Leeds retail market has joined the top three best value markets in the UK within DTZ’s UK Fair Value Index™.

Whilst there is a tight supply of prime commercial investment properties throughout the UK, prime regional industrial and retail property markets are still attractive, including Leeds.

According to the report, Leeds retail offers investors a similar opportunity to Manchester retail, which tops the index, and is boosted by good rental growth prospects, which will help push capital values higher by 3 per cent per annum over the next five years.

Greg Davison, Director for DTZ in Leeds said: “Leeds remains one of the UK’s most attractive markets across all sectors, offering good opportunities for investors, and whilst we have seen strong yield compression, particularly for prime assets, this is a trend reflected across UK Regional markets, and one that we anticipate will stabilize in the short term. This yield compression has resulted in prime city centre offices in Leeds being classified as “fully priced” and is reflective of investor demand for such assets significantly outstripping available supply. With many institutional funds being behind their spending plans for 2015 allocations to prime regional offices, we expect this pressure to remain for the rest of 2015 and into 2016.

"The index reflects what is happening at the prime end of the market and only tells part of the story. Inevitably, there is an extremely attractive underlying secondary market offering strong opportunities to create and add value, particularly within the office and industrial sectors, both of which benefit from strong tenant demand and upwards pressure on rents.”