British property investors are heading north according to new research which suggests that Edinburgh is the top city outside of London in UK for commercial property investment.
Scottish city Edinburgh came top of law firm Morton Fraser’s research into the top British cities according to their attractiveness as investment options.
British property investors ranked their top ten cities:
- Edinburgh – 52%
- Bristol – 48%
- Manchester – 40%
- Leeds – 31%
- Cardiff – 31%
- Glasgow – 30%
- Birmingham – 26%
- Newcastle – 21%
- Dundee – 17%
- Aberdeen 16%
Despite Edinburgh coming out on top, it only narrowly achieved a majority in favour of its attractiveness. Edinburgh’s fellow Scottish city Aberdeen came bottom which could relate to its energy dependent economy being hit by falling oil prices, which has led to thousands of job losses and the contraction of the oil and gas industry.
David Stewart of Morton Fraser told propertywire.com that the ‘net positive’ cities had demonstrated real economic resilience since the recessions.
“Their success in protecting inward investment, attracting business and talent, and developing infrastructure means property investors can more easily envisage long-term gains.
“Regional commercial property investment has a lower upfront capital cost but can often return higher yields and longer tenant leases, improving income security. However, those benefits are outweighed by perceived economic risks in most regional cities by potential investors,” he added.
According to the law firm, they expect to see Leeds, Cardiff and Glasgow move into a net positive investment score over the next 12 months, with at least 30% of investors felt they were attractive locations.
“Demand for equity stakes in commercial property vehicles has increased in recent years as investors seek value and flexibility in the asset class. City region devolution will play a key role in ensuring investors see regional locations as positive income generating opportunities,” Stewart explained.
“That said, experience shows that a good property investment can withstand economic fluctuations and the right opportunities can be found in all these locations,” he concluded.