New research by Lambert Smith Hampton has highlighted that commercial property has grown by 18 per cent in the north-east of England.
The UK Investment Transactions report for the first quarter of 2013 showed that the average deal size had gone up to £4 million in the region.
The largest deal in the first three months was a retail unit being sold on Blackett Street in Newcastle for £5.3 million.
However, it was not all good news, as the report further revealed that 50 per cent of commercial property investment volumes had fallen to £12 million in the same period. Furthermore, there had been a 57 per cent drop in the number of deals made in the first three months of the year, compared to the previous quarter.
Abid Jaffry, head of capital markets in the north, stressed about how retail and leisure sectors were still leading the pack for investment: "Investor appetite again remained focused on retail and leisure, with the total value transacted in this sector accounting for just under two thirds of all activity within the region.
“UK institutions were the biggest net-investors into the north-east market in Q1 2013, recording just over 44 per cent of the total quarterly investment volume - the largest amount invested by UK institutions since Q2 2011.”
This comes in conjunction with investment falling by a quarter in central London offices, whilst regional office, retail and industrial assets had seen an investment of £850 million in the first quarter. Analysts suggest that the high prices and short stock in London have forced investors to look regionally, causing this boom particularly for secondary regional property in the north-east. It is this price gap that has encouraged more property buyers to look outside of the capital city.