South West Investment Market: Industrial Still Dominates, But Offices Gaining Momentum
The commercial property investment market in the South West continues to show resilience, with ongoing activity across various sectors, particularly industrial. Despite broader economic uncertainty, we are seeing well-priced opportunities attracting interest and deals completing off-market.
Industrial remains the most active sector, driven by strong occupier demand and limited supply. We recently completed the off-market sale of a multi-let industrial portfolio, achieving a net initial yield below 7%, which clearly indicates that investors are still willing to pay a premium for secure income in this asset class.
Offices, however, are beginning to regain investor confidence, particularly in key regional centres such as Plymouth. We’ve recently sold an office investment at just over 11% net initial yield. This was a long leasehold interest, demonstrating the appetite for well-priced assets even with leasehold considerations.
Currently, we are marketing an office investment at Devonshire Meadows, let on short-term licences, which is attracting strong interest at yields in excess of 12%. Alongside this, we also have several industrial investment opportunities available. This reflects continued investor focus on this high-performing sector.
The rise in demand for office space in Plymouth, combined with increasing rents for high-quality stock, suggests that now is a strong time to consider office investments. Investors focusing on rental growth potential are seeing value in the market.
Retail continues to face headwinds, and investor appetite remains selective. Buyers are focused on securing what they perceive to be value-for-money opportunities, typically favouring units let to secure tenants or those in prime locations.
At Vickery Holman, we remain active across the region and across all asset types. If you’re considering a disposal, acquisition, or portfolio review, our Investment and Agency team would be happy to assist.
