The Midlands & Anglia remains an attractive proposition for buyers looking for alternatives to the South and London, and the increasingly high profile of the area is also attracting interest from overseas buyers, as Christie & Co predicted in its Business Outlook 2019 report. Buyer appetite remains but is dependent on lenders’ continued support of alternative property sectors. Whilst funding is taking longer to acquire, Christie & Co notes that support from both mainstream banks and alternative funders remains.
The upcoming 2022 Commonwealth Games, which is to be hosted in Birmingham, continues to draw attention and drive improvements to the area, while the Cambridge motorway improvement works, which are expected to be concluded in 2020, will have a positive impact on accessibility to East Anglia.
Another key development in the region is the implementation of the HS2 rail line, which has been a consistent topic of local discussion for the Midlands and there are a number of preparations and regenerations underway as a result.
The care sector in particular remains buoyant with transactional activity levels remaining high, and whilst funding can be challenging, a number of lenders remain active in the marketplace to facilitate the appetite of existing and new operators.
Christie & Co notes increased interest in specialist provision, particularly learning disability homes and groups, with a number of deals currently being concluded in East Anglia. Strong demand for turnaround opportunities is also being seen in the elderly sector, in conjunction with a higher proportion of distressed sales, which are attractive to that part of the market.
Undergoing improvements to road and rail networks will provide easier access the Midlands & East Anglia and ultimately increase the development and population in these areas, resulting in higher buyer and user demand for care businesses.
As the London and South East markets become even more competitive, Christie & Co finds major cities like Birmingham and Nottingham are becoming increasingly popular areas for operators to explore, where real estate can be better value for money and a return on investment can be much higher.
There is positive activity in and around the major conurbations, Christie & Co notes, and due to a lack of supply in some areas, when quality assets do come to the market there is a high degree of interest which has resulted in numerous offers. There has also been an increase in demand from corporate and regional group operators looking to expand into the Midlands area at the top end of the market.
While dental practice sales across the Midlands continue to achieve strong prices, there is no shortage of interest from buyers, however Christie & Co notes that some practices situated in small villages away from the large towns and cities have seen lower interest because of the difficulty recruiting dentists into rural areas.
With cheap finance from banks and, in many cases, support from parents and grandparents, Christie & Co now sees first time buyers competing for larger practices which traditionally would have gone to a corporate or multi-site operator. Many of the first time buyers Christie & Co speaks to have plans to grow and establish a small group, so there will be some interest to see how these develop over the years ahead.
Despite political and economic challenges in the UK at present, positive market and funding conditions are being seen throughout the hotels sector in East Anglia, as evidenced by an increasing level of demand, viewings and offers being seen, particularly over the last six months.
Occupancy and average room rates throughout the region remain stable too and the prospects are positive for the short, medium and longer term in the market, reflecting the increasing numbers of visitors to the region and boosting leisure trade for operators, both for smaller hospitality businesses and the corporate end of the market.
Pubs & Restaurants
The pub and restaurant markets remain active and buyer appetite has been consistent for good quality opportunities, typically profitable concepts with proven market appeal in a high footfall area. There has been good supply in the market, but demand is slightly outpacing this meaning increased competition and desire for high quality sites to acquire.
In the first half of this year, Christie & Co has seen the overall quality new instructions improving, with those holding on to a strong business now seeing a good opportunity to take advantage of the increased appetite. For the remainder of the year and going into 2020, Christie & Co anticipates that the licensed sector in the Midlands & East Anglia looks optimistic, with growing tourism and trade for those businesses particularly in city centre and densely populated locations.
Lee Howard, Regional Director – Midlands & East Anglia at Christie & Co comments, “With all the recent media and political uncertainty, buyers remained active throughout the region and we have certainly seen an increase in demand from buyers seeking an affordable alternative to the South. We expect this to continue throughout the remainder of 2019 and beyond.”