PHILIP’S BLOG 10/06/2014

centenary-plaza-apartments

A looming surge in investment inwards

In recent days I have talked to private investors from London & the South Coast, institutional investors from Scotland, Chinese buyers based in Switzerland and noticed how all of them can now see real value with potential here in Birmingham’s core with residential Buy to Let.

The combination of an improving local market with increasing numbers of local buyers looking to buy and put down roots in the City alongside many tenants looking for accommodation offers investors the combination of high occupancy rates, high yields but also the potential for real capital growth going forward. London as an alternative investment now seems to be losing its golden ticket status. Whilst the demand & occupancy levels there are high for rented stock, the yields offered on the Capital value are low & more importantly the future capital plus possible rental price growth now look muted for the short & medium term after several years of strong growth.

In Birmingham our thoughts are that the new apartment stock planned for the next two years will absorb much of the investment interest now being shown & this extra stock may curtail any large rental price growth. We expect the occupancy levels to remain solid as Birmingham continues to become more popular for outsiders looking to base their businesses here plus it continues to retain many of the graduates and younger professionals who now learn their trades at the leading accountancy & legal firms based in the City.

The key going forward is going to be location, as always. The ten minute walk rule to New Street station, Colmore Row or Brindley Place will give investors the low voids between tenancies they seek and the ongoing high occupancy.

Advice as ever is the key.