Overseas investors spend £489m on Manchester offices

XYZ Building, Manchester

Real estate company Savills’ latest Manchester Office Spotlight report said overseas investors led by German firms accounted for 72% of all office acquisitions in Manchester last year with deals totalling £489 million.

Weak sterling following the Brexit vote has made prices of UK assets more attractive for international buyers.

Savills said German investors acquired more commercial property in Manchester than any other nationality in 2016 with deals worth £376 million.

These deals included Deka Immobilien’s £164 million purchase of One St Peter’s Square and Union Investment’s £85 million acquisition of the XYZ building.

US investors were the second most active nationality in Manchester in 2016 with a 36% market share of total overseas commercial property acquisitions.

This included Ares Management’s £115 million purchase of 3 and 4 Piccadilly Place.

Nick Okell, investment director at Savills Manchester said: “The UK is an attractive investment destination for global buyers because of our legal system, landlord friendly regulations, standardised market, time zone and culture.

“The recent sterling devaluation has made pricing even more attractive for investors whose currency is pegged to the US dollar.

“Manchester’s global profile means international demand for commercial property assets in the city looks set to remain strong throughout 2017.”

James Evans, head of Savills Manchester, added: “Confidence in Manchester’s commercial property market is robust.

“In the offices sector, demand did not waver after the EU referendum, with 70% of last year’s 1.3m sq ft total lettings taking place in H2.

“Combined with all the other ingredients Manchester has to offer, the city is well-placed to deliver significant high value business growth and attract further inward investment.”