Investors’ property love affair continues
Property Week/PrimePitch survey shows private buyers on the increase

By Natalie Stevenson

A growing number of private investors are turning to the commercial property market, especially the office sector.

In the third quarterly survey of 600 private property investors by Property Week and online investor forum PrimePitch, 81% of investors said they would increase their buying, compared with 72% in July.

More than half of investors questioned said they would continue to invest in commercial property, despite this year’s increase in base rates and the threat of further rises.

James Tanner, head of property consultancy at PrimePitch’s owner, Property Investment Exchange, said: ‘People have been spurred on by prices and the capital value growth rates in the market. Commercial property is being viewed as a genuine alternative investment category.’

And investors have no plans to see their existing properties. Only 5% of investors said they wanted to increase their selling of commercial property. ‘There is definitely a fear of selling because there is little stock to replace what you sell,’ said Tanner. ‘Investors don’t know what to do with the money raised by a sale.’

Auctions continued to be a popular way to buy property, with 60% of investors keen to buy at auction and 83% of investors keen to sell.

Tanner argued: ‘Auctions give private buyers better access to property and the demand will go to where the supply is.’

The investors surveyed were buyers of lots ranging in price between £250,000 and £750,000. Although retail properties have been popular during the past three months, the percentage of investors who said they would increase the amount of offices they brought has doubled since the last survey in July.

Tanner said: ‘People are definitely more confident in the office market. Retail has reached its high level, and investors feel there isn’t much room for more capital growth and that retail prices have become as steamy as they are going to be.’

The July survey showed a growing business confidence and a small increase in the popularity of the stock market. This survey has shown even more investor confidence in stocks and shares with 51% of investors rating them as the best-performing asset class.

But Tanner argued that this was to be expected since the recovery of the stock market had begun and the he pointed out that a third of investors rate commercial property as the best-performing asset class.