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Gloucestershire Business News

Industrial property at heart of February's commercial investments

Overseas investors accounted for half of all investment activity so far this year as February saw £2billion of capital in commercial real estate according to Colliers latest Property Snapshot.

And the investment management company said industrial assets were at the heart of the activity with £760million deployed in the sector during the month.

That was up from £580million in January and above the £600million average for the first 11 months of last year.

Colliers deputy UK chief economist Oliver Kolodseike said: "It's been a quiet couple of months for the investment market, in fact it is the slowest start to a year since 2012.

"It isn't all doom and gloom with the country showing some resilience to this current lockdown.

"Despite the economy remaining nine per cent smaller than before the outbreak of coronavirus, survey data suggests that the February GDP print should be more positive."

The UK office sector attracted £350million of investment during the month, up from January's £230million but well below the 2020 monthly average of £1.1billion.

Among the largest deals outside London, The Regional Office Property Unit Trust bought St James House in Cheltenham for £21.8million.

Around £630 million was deployed in the alternative/mixed-use and leisure segments in February, down from the £1billion invested in January and less than half the 2020 monthly average of £1.5 billion.

Student housing accounted for £455million of investment, the highest monthly figure since February 2020.

Colliers head of national capital markets John Knowles said: "There is ample dry powder ready to be deployed into UK commercial real estate, however not being able to travel and view assets is creating a real backlog.

"Many investors are focused on an active second half of the year once travel bans are relaxed and the vaccine has been rolled out more extensively across Europe and the rest of the world."

The findings of the report were echoed by Simon Tothill, property and development director of developers Robert Hitchins.

He told the Punchline Friday Business Briefing: "The distribution and industrial market has been screaming and there has been significant amount of demand from distribution and retailers moving their businesses online.

"They are also flavour of the month in terms of investments."

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