Sector Focus
Property
City is just average, say investors
Birmingham’s prospects in terms of property investment are looking distinctly average, according to a new survey. The city is well down the
rankings, managing 25th place in a list of 31 key cities in western and eastern Europe, according to the latest edition of the ‘Emerging Trends in Real Estate Europe’ survey. This survey is undertaken jointly
by PwC and the Urban Land Institute, and provides an outlook on investment and development trends, capital markets, cities, sectors and other real estate issues throughout Europe. The report says that it is a
‘hugely challenging time for real estate in Europe’, following the effects of the coronavirus pandemic and Brexit. Although real estate is still seen
as an asset likely to generate acceptable returns, it faces huge challenges from Covid and Brexit, in terms of security of income from offices and retail. In addition, this twin threat has
accelerated trends in remote working and online shopping, which have put a further question mark against the future of office and retail buildings. in terms of overall retail prospects,
Birmingham’s prospects are viewed as average at best. The city is rated 25th in Europe,
from 24th last year, and its investment and development prospects have declined slightly. Top of the list is Berlin, followed
by London, Paris, Frankfurt and Amsterdam. Birmingham’s great regional rival Manchester is 22nd, up one place from the last survey. London is still viewed as a relatively good prospect, the only location in the UK to achieve this.
‘It is a challenging time for the real estate industry’
Jonathan Clements, real estate
tax director at PwC, said: “The pandemic has accelerated a number of previously identified structural trends, notably the increase in e-commerce and remote working. This has forced investors to re-examine the risk and return on assets. “It is a challenging time for the
real estate industry, with global political change, Brexit and the pandemic creating uncertainty, and understandably a cautious outlook for 2021, but this is balanced by the
weight of capital to be deployed. “The uncertainty of this year has
shifted priorities in the sector; we’ve seen a move away from the mainstay sectors of retail, hospitality and leisure, a pause in relation to office, and a strengthening demand for alternative sectors such as housing, data centres, life sciences/health, energy and communications infrastructure and a continued desire for industrial property and logistics warehouses – which all benefit from growing demand in this new environment.
“There’s a growing requirement
to look more closely at the value that can be derived from these demand shifts, and newer, emerging asset classes. “Investors are therefore looking
beyond real estate and into broader real assets – the built environment and infrastructure that surrounds us. “These are all inextricably linked,
not only to one another, but to how we live, work, consume and spend our leisure time – and we will see these trends play out in the region.”
Key retail site is primed for a transformation
A key retail site in Sutton Coldfield is set to undergo a complete transformation into a modern, mixed retail and residential destination, with a gross development value in excess of £20m. Birmingham-based investor and asset manager Mercia Real Estate acquired the one- acre site, which is located at 10-38 Birmingham Road – on a key route from Sutton Coldfield into Birmingham city centre, in October 2018. Plans have been drawn up for the phased demolition and construction of the current buildings to ensure that the existing tenants can be accommodated and retained and in order to avoid too much business disruption. The current buildings will be replaced with a
mixture of purpose-built retail units tailored towards the independent nature of the current occupiers. The existing tenants are to be offered first refusal on the new scheme. A mix of 66 modern and spacious one and two bedroom apartments, including two duplexes, distributed across three floors above the retail units will also be introduced, with 37 residents parking spaces at the rear.
62 CHAMBERLINK March 2021
The development, once complete, is designed to reflect and complement the attractive art deco styles of the surrounding areas.
Chief executive of Mercia Real Estate, Samuel
Clark, said: “This site is in a prime position in the highly desirable areas of Sutton Coldfield.
“Our plans, once approved, will see the site
given a completely new lease of life, laying the foundations for businesses to thrive, create jobs, and creating an attractive and vibrant entrance to the town and a place for the community to eat, shop and live. We look forward to plans being approved.”
Jonathan Clements: Investors are looking beyond real estate
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