Property markets outside London are benefiting from the spending power of private Irish investors. Recent deals have seen private individuals buy investment properties in diverse areas - from northern cities such as Leeds to the small town of Walton-on-Thames in Surrey.
In Scotland, in particular, the market has been helped by the emergence of Irish investors in the last six months, says Willie Anthony, chairman of the Royal Institute of Chartered Surveyors in Scotland. "Property here is still fundamentally good value for investors. However, the recent increase in stamp duty has had an immediate knock-on effect on the value of investments."
He says the arrival of Irish investors in force, with the purchase of Buchan House, a city centre office building in Edinburgh, and Queens Drive retail park in Kilmarnock, had an impact at the end of last year. More recently, a private Irish investor bought the landmark 40,000 sq ft RWF House, on Union Street, Glasgow, for £7 million, reflecting a net initial yield of 7.15 per cent .
Irish buyers have traditionally liked to buy in the south-east, says Jeremy Hodgson of Allsop & Co. They are also pulled to areas which have historic or family connections, such as the major cities of Birmingham, Manchester and Liverpool.
Although investors are buying property through private treaty, they are not just looking for straight-forward property sales. In April, a syndicate of Irish investors, advised by CB Hillier Parker and Hamilton Osborne King, bought a 39,052 sq ft office building from Yorkshire Investment Properties in a sale-and-lease-back deal for £9 million. The offices are occupied by Yorkshire Water, which is paying £667,600 per annum.
"I think most regional cities are seeing much the same pattern," says Jonathan Shires, an investment surveyor at DTZ Debenham Thorpe in Leeds, which advised Yorkshire Water. "There is increasing competition for property in London and, if the fundamentals are right, then sound investments can be found elsewhere. Leeds has been growing as a city for the last few years and although we have seen office take-up in the region of 800,000 sq ft in the first six months of the year, there is only some 320,000 sq ft currently available of good quality space, with a further 300,000 sq ft in the development pipeline."
Last week Sean Dunne's building firm, Mountbrook, bought the freehold of a 30,615 sq ft office building in Walton-on-Thames, Surrey, for £9.3 million. The deal reflected a net initial yield of 6.72 per cent. The property - known as Tasman House - is let to PGS Exploration (UK) and Petroleum Geo-Services (UK) at £658,223 per annum for 20 years from December, 1997. Strutt & Parker advised Saville Gordon Estates. Gunne Commercial represented Mountbrook.
