INSIGHT - Edition Ten - Winter 2021 online - Flipbook - Page 19
WHO WOULD BE A PRIVATE
INVESTOR IN THIS ERA!
We hear from one of our (anonymous)
clients with his thoughts for the future
of private investment in the North
East.
Cast your mind back to the spring of 2007 when both
the residential and commercial property markets were
booming. At that time no one envisaged that in the
space of 12 years the economy would suffer from the
financial crash in 2008-10 and then the catastrophe
of Covid. Two so-called “Black Swan“ events in such a
short period. These events have had such a profound
effect on the property market. Who would be a private
investor in this era!
At long last Covid, and the effects of the lockdowns,
are gradually receding with the economy recovering.
Interest rates remain historically low with finance
available and large public investment. The Covid
lockdowns have had a significant effect on the property
market with retail appearing to be the worst affected
property sector despite Government grants, loans,
and rates holidays. Driving around the North East it’s
disheartening to see such a lot of empty shops.
In contrast, the industrial sector is experiencing
strong demand, particularly from the boom in home
deliveries with firms requiring additional warehouse
and distribution facilities. The housing market is an
enigma with strong demand leading to higher prices
despite the economy being closed for long periods. You
would normally expect prices to fall rather than rise in
a recession.
the areas worth considering? Towns such as Blyth
and Darlington are to benefit from major inward
investment. The battery factory in Blyth is rumored
to create 3,000-5,000 jobs with another 5,000 in the
supply chain. That level of investment coupled with
the employment created should have a material and
positive impact on the town. The new Treasury campus
in Darlington will have a similar effect.
I myself am attracted to Blyth and Teesside due to
the amount of investment and job creation proposed.
Demand for all types of business property in these
areas should increase leading to higher values.
Another area of interest is local shops and business
property located outside the city centres in affluent
areas that are or can be let to strong local businesses.
One of the effects of Covid appears to be that people
are shopping locally rather than in the centre of towns.
The residential sector has experienced strong capital
growth particularly in rural areas with urban areas
lagging behind due to Covid effects. A recent report has
suggested that rents are now rising at their fastest pace
in many years. As people return to the cities there may
be investment opportunities arising from depressed
prices but with rising rents. I am now positive that
there are exciting investment opportunities available
that are different from the pre-Covid age.
Looking to the future and assessing opportunities
for investment in these post-Covid times, what are
youngsRPS is retained by a number of private investors
and property investment companies in the acquisition
and disposal of property investments throughout the
UK.
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customers. These valued relationships are founded
by the dedication and hard work of our expert team.
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