Investors poised to pile into property
Sunday 10 October 1993
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.
Children's bookseller wins The Independent's new author search
Board creates magnetic field to achieve lift
Follow the latest news and score as Chelsea take on Maribor at Stamford Bridge.
Company reveals $542m investment in start-up building 'a rocket ship for the mind"
Singer says the track was 'force-fed down people's throats'
- 1 Jack the Ripper: Scientist who claims to have identified notorious killer has 'made serious DNA error'
- 2 Banksy arrest hoax: Internet duped by fake online report claiming artist's identity has been revealed
- 3 Former East 17 frontman Brian Harvey turns up at Downing Street and 'demands to speak to Prime Minister'
- 4 The inventor of the Facebook 'like' button says he never made a 'dislike' button because he feared the 'unfortunate consequences'
- 5 Russell Brand threatened with arrest after filming outside Fox News headquarters
Jack the Ripper: Scientist who claims to have identified notorious killer has 'made serious DNA error'
Oscar de la Renta dead: Legendary US fashion designer dies after long cancer battle aged 82
Oscar Pistorius: The brutal prison life that awaits disgraced athlete
Banksy arrest hoax: Internet duped by fake online report claiming artist's identity has been revealed
Super-sized ships arrive in Britain: How big can they get?
Cameron is warned 'no possibility' of UK reducing immigration and that bid to bring in quota on migrant workers would be illegal
Residents should throw a street party and mix with immigrant neighbours, councils told
Russell Brand threatened with arrest after filming outside Fox News headquarters
London bus driver 'kicks gay couple off for kissing'
Lord Freud: Tory welfare minister apologises after saying disabled people are 'not worth’ the minimum wage
Lord Freud hangs on as MPs of all parties 'call for his head' over disability comments
iJobs Money & Business
£23000 per annum + pension and 22 days holiday: Ashdown Group: An established ...
£27000 per annum + pension, 22 days holiday: Ashdown Group: An established ind...
£23000 - £26000 Per Annum: Clearwater People Solutions Ltd: Our client is curr...
£25 - 30k: Guru Careers: A Corporate Actions Administrator / Operations Admini...