Regional property investment promises better returns than London in Brexit Britain
Middle Eastern buyers are looking beyond London to invest in property, regional investor Palace Capital has said.
With London becoming such an expensive place to buy, foreigners are eyeing up the regions to get better returns.
Read more: Asian investors have spent £1.5bn on London property since the Brexit vote
Palace Capital specialises in commercial properties in hubs outside London, including Manchester, Birmingham and Coventry, which the firm says are the UK's growth areas.
Neil Sinclair, chief executive of Palace Capital, said: "We've had an approach from a Middle Eastern group, and two or three years ago that would have been extremely unusual.
"I think they can't get the same returns in London – only three or four per cent. But we haven't got to worry about very high prices. London is a bit too high. Not so in the regions."
In prime Manchester, investors can get a return of around five per cent. And, in Brexit Britain, there's more on the market.
"We think Brexit will bring us opportunity," Sinclair said. "But we've got two years of uncertainty, so one or two people always get a bit worried, and they decide to sell. So that kind of market suits us."
In addition, occupiers are increasingly looking to the regions as a base for offices. The civil service and several accountancy firms have been moving staff out of the capital.
Read more: Helical sells £35m investment property
John Duckworth, lead director for UK occupier services at JLL, said: "More firms than ever before are assessing their portfolios to consider national on shore locations across the UK. This is a trend that we see as only accelerating in the years to come.
"Many are exploring ways to reduce cost, attract talent, and drive efficiencies in their operations. UK cities from Bristol to Edinburgh are benefiting as firms seek to take advantage of the talent pools and cost benefits of an alternative UK presence to complement their London offices."