Investors poised to pile into property

MORE than pounds 10bn is waiting to be invested in the UK property market, which would revitalise the sector and generate a boom similar to that of the 1980s, according to a report from surveyors DTZ Debenham Thorpe.

DTZ, part of the team that advised Greycoat shareholders to accept the unsuccessful bid from Postel because it believed the company would have trouble selling its properties, claims the prices of commercial properties are soaring.

The report, produced by John Rigg, DTZ's head of research, says property yields (the rental income of a property divided by its price) have dropped by around 2 per cent since the beginning of August. This would imply that prices have increased by more than a fifth in just two months.

Mr Rigg believes institutional investors are desperate to invest in the property market, and have earmarked around pounds 7bn for this purpose. In addition, property companies, many of which have raised money from rights issues in recent months, have around pounds 1.75bn, while overseas investors are likely to put in about pounds 2bn.

He says investors have been attracted by the relatively high yields on property compared with shares or bonds, and by the devaluation of sterling, which has made British properties cheap when compared with those on the Continent.

The excitement within the market was demonstrated by the surprise announcement by Scottish Metropolitan Properties that it had sold its Saltire Court development in Edinburgh for pounds 53.1m, 13 per cent more than the asking price when the site was put on sale. The prestigious, but only partially let, site in the lee of Edinburgh Castle attracted five bids at above the asking price.

Chris Turner, property analyst at stockbroker Barclays de Zoete Wedd, says the market is moving so quickly at the moment that it is hard to keep up with the excitement.

He says the Saltire Court deal is just one example of the bidding rush that has been prompted by the weight of money targeted at the property sector.

'Some property companies are putting buildings on sale, then finding they have so many bids that they take them off the market to put them on again at a higher price,' added Mr Turner.

He also said that some investing institutions are buying property shares as a stopgap to park their money while they try to find a way to tie up the money in bricks and mortar.

(Photograph omitted)

ebooksAn unforgettable anthology of contemporary reportage
Life and Style

Company reveals $542m investment in start-up building 'a rocket ship for the mind"

Bourgogne wine maker Laboure-Roi vice president Thibault Garin (L) offers the company's 2013 Beaujolais Nouveau wine to the guest in the wine spa at the Hakone Yunessun spa resort facilities in Hakone town, Kanagawa prefecture, some 100-kilometre west of Tokyo
Arts and Entertainment
James Blunt's debut album Back to Bedlam shot him to fame in 2004

Singer says the track was 'force-fed down people's throats'

CSKA Moscow celebrate after equalising with a late penalty

Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Helpdesk Analyst

£23000 per annum + pension and 22 days holiday: Ashdown Group: An established ...

Senior Helpdesk Analyst / Service Desk Co-ordinator

£27000 per annum + pension, 22 days holiday: Ashdown Group: An established ind...

Senior Pensions Administrator

£23000 - £26000 Per Annum: Clearwater People Solutions Ltd: Our client is curr...

Corporate Actions Administrator / Operations Administrator

£25 - 30k: Guru Careers: A Corporate Actions Administrator / Operations Admini...

Day In a Page

Two super-sized ships have cruised into British waters, but how big can these behemoths get?

Super-sized ships: How big can they get?

Two of the largest vessels in the world cruised into UK waters last week
British doctors on brink of 'cure' for paralysis with spinal cord treatment

British doctors on brink of cure for paralysis

Sufferers can now be offered the possibility of cure thanks to a revolutionary implant of regenerative cells
Let's talk about loss

We need to talk about loss

Secrecy and silence surround stillbirth
Will there be an all-female mission to Mars?

Will there be an all-female mission to Mars?

Women may be better suited to space travel than men are
Oscar Pistorius sentencing: The athlete's wealth and notoriety have provoked a long overdue debate on South African prisons

'They poured water on, then electrified me...'

If Oscar Pistorius is sent to jail, his experience will not be that of other inmates
James Wharton: The former Guard now fighting discrimination against gay soldiers

The former Guard now fighting discrimination against gay soldiers

Life after the Army has brought new battles for the LGBT activist James Wharton
Ebola in the US: Panic over the virus threatens to infect President Obama's midterms

Panic over Ebola threatens to infect the midterms

Just one person has died, yet November's elections may be affected by what Republicans call 'Obama's Katrina', says Rupert Cornwell
Premier League coaches join the RSC to swap the tricks of their trades

Darling, you were fabulous! But offside...

Premier League coaches are joining the RSC to learn acting skills, and in turn they will teach its actors to play football. Nick Clark finds out why
How to dress with authority: Kirsty Wark and Camila Batmanghelidjh discuss the changing role of fashion in women's workwear

How to dress with authority

Kirsty Wark and Camila Batmanghelidjh discuss the changing role of fashion in women's workwear
New book on Joy Division's Ian Curtis sheds new light on the life of the late singer

New book on Ian Curtis sheds fresh light on the life of the late singer

'Joy Division were making art... Ian was for real' says author Jon Savage
Sean Harris: A rare interview with British acting's secret weapon

Sean Harris: A rare interview with British acting's secret weapon

The Bafta-winner talks Hollywood, being branded a psycho, and how Barbra Streisand is his true inspiration
Tim Minchin, interview: The musician, comedian and world's favourite ginger is on scorching form

Tim Minchin interview

For a no-holds-barred comedian who is scathing about woolly thinking and oppressive religiosity, he is surprisingly gentle in person
Boris Johnson's boozing won't win the puritan vote

Boris's boozing won't win the puritan vote

Many of us Brits still disapprove of conspicuous consumption – it's the way we were raised, says DJ Taylor
Ash frontman Tim Wheeler reveals how he came to terms with his father's dementia

Tim Wheeler: Alzheimer's, memories and my dad

Wheeler's dad suffered from Alzheimer's for three years. When he died, there was only one way the Ash frontman knew how to respond: with a heartfelt solo album