Net investment levels into property are slowing down, according to figures from the Office of National Statistics.
They show a significant net disinvestment in real estate in the first quarter of 2005, with disinvestment by insurance companies, pension funds and trusts of #1.2 billion.
More significantly, the figures also show a large revision to data for the fourth quarter of 2004, from disinvestment of #1.2 billion to net investment of #238 million.
Jonathan Wallis, head of investment at Jones Lang LaSalle?s Birmingham office, said: ?While some property companies have taken the view over the past six months that their assets were at the top of the market and decided to sell, these deals don?t provide any indication of a disinvestment trend.
?Sales by property companies represent 29 per cent of all investment sales in Birmingham over the past six months, but this is merely money moving around within the sector.?
Pointing to a lack of properties in Birmingham as the reason behind the lower property investment figures, he added: ?In our experience, the downturn in investment in Birmingham is due to the lack of suitable investment stock available to investment institutions.
?During the first half of the year, there has only been one significant office investment transaction in the city, the sale of Priory and Temple Court for a reported #121 million in March. If you compare that with the nine separate transactions and # 264 million invested during the same period last year, it is easy to see that investors are crying out for more commercial opportunities in Birmingham.?
Mr Wallis believes that the difficulties are set to continue, with few opportunities forthcoming for the second half of the year.
He said: ?While Rutland House on Church Street is currently being marketed with a #17 million price tag and 134 Edmund Street is reportedly under offer to Royal London for around #37 million, there are precious few investment opportunities out there to attract interest in the city.?
Meanwhile, Jones Lang LaSalle has let a 3,500 sq ft unit at the Royal Priors Shopping Centre in Leamington Spa to clothing retailer Bank, on behalf of Morley Fund Management.
The 152,000 sq ft Royal Priors centre houses 65 units in total, all of which are now fully let. Bank will be operating within a 15 year FRI (full repairing and insuring) lease, expiring in 2020 with five yearly upward only rent reviews.
Paul Garry, associate director at Jones Lang, said: ?Bank has a strong presence in the Midlands market with two stores in Bullring and approximately 30 more nationwide.
?The company traditionally trades in major retailing centres such as Trafford Centre, Manchester, Cribbs Causeway Bristol and West Quay Southampton, so its move to Leamington Spa and the Royal Priors shopping centre is a significant one.
?It fills a much needed gap in customer demand and further establishes the centre as a leading shopping location in the Midlands.?
Wareing and Company are joint agents on the scheme.
steve_pain@mrn.co.uk
