15. Juni 2012 
Print
Print
Southbank yields the highest in Central London
The first comprehensive Report of office performance on Southbank reveals that the market delivered the highest Initial Yields and Income Return of all Central London markets in 2011.
The annual Report, published by Farebrother and IPD details that Yields on Southbank were 5.4%, the highest in Central London, a full 100bps higher than West End offices. Income Return on Southbank was 5.7%, again outperforming all other Central London markets which averaged 4.8%, with the West End market delivering 4.7% and City offices 5.1%.
Alastair Hilton, Head of Investment at Farebrother commented, “The total value of Investment transactions on Southbank increased by 33% from £401.2m in 2010 to £531.8m in 2011 but a lack of opportunities, competing residential values and general illiquidity in funding is holding the market back. Key asset performance drivers such as Southbank’s low Availability Rate and restricted Development Pipeline remain.”
Greg Mansell, Senior Research Manager at IPD said, “Whilst the overall UK commercial Real Estate market is in double dip recession, London’s performance remains the only positive constant. There has been considerable pressure from Investors and occupiers to acquire new space in the Capital – hence the emergence of the Southbank. Southbank benefits from the same underlying fundamentals as the rest of Central London, but on a considerably cheaper basis.
Investors moving into the Southbank are often UK-based, priced out of the conventional centre but with a little more local knowledge and discretion. Such Investors can enjoy income returns in line with the UK office average sourced from low-risk occupiers – a key attribute when considering the ever-increasing emphasis on income risk and return in the current climate.”
The annual Report, published by Farebrother and IPD details that Yields on Southbank were 5.4%, the highest in Central London, a full 100bps higher than West End offices. Income Return on Southbank was 5.7%, again outperforming all other Central London markets which averaged 4.8%, with the West End market delivering 4.7% and City offices 5.1%.
Alastair Hilton, Head of Investment at Farebrother commented, “The total value of Investment transactions on Southbank increased by 33% from £401.2m in 2010 to £531.8m in 2011 but a lack of opportunities, competing residential values and general illiquidity in funding is holding the market back. Key asset performance drivers such as Southbank’s low Availability Rate and restricted Development Pipeline remain.”
Greg Mansell, Senior Research Manager at IPD said, “Whilst the overall UK commercial Real Estate market is in double dip recession, London’s performance remains the only positive constant. There has been considerable pressure from Investors and occupiers to acquire new space in the Capital – hence the emergence of the Southbank. Southbank benefits from the same underlying fundamentals as the rest of Central London, but on a considerably cheaper basis.
Investors moving into the Southbank are often UK-based, priced out of the conventional centre but with a little more local knowledge and discretion. Such Investors can enjoy income returns in line with the UK office average sourced from low-risk occupiers – a key attribute when considering the ever-increasing emphasis on income risk and return in the current climate.”
