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Short run investments in regeneration areas are being hit harder than elsewhere
Total returns on property in areas that host regeneration projects are lower and are falling at a faster rate than other types of UK real estate investment,a report commissioned by national regeneration agency English Partnerships shows today.
The total return for all property in regeneration areas fell from 16.7% in 2006 to minus six% in 2007, compared with a UK average which slid from 18.1% to -3.4% over the same 12-month period, according to the report by property investment data provider IPD.
There is now a 2.6% gap between returns from investment in property in regeneration areas and the UK average. This is 1.2% wider than in 2006, the report shows. To compile the report IPD took a sample of 659 properties worth £8.13billion in 37 areas of the UK.
But while short-term property returns have been hit harder by the recent market downturn than the UK average, long-term bricks and mortar investment in areas with regeneration schemes are still a solid option, the report says.
Over the medium and longer term, total returns from regeneration areas are identical to the broader UK as a whole, the report says.
André Gibbs, from property developer Argent, said: "We feel that the Index has already gone a long way to demonstrating to institutional investors that property investments across some of the UK's most deprived areas can show returns equal to investing in core locations."
The total return for all property in regeneration areas fell from 16.7% in 2006 to minus six% in 2007, compared with a UK average which slid from 18.1% to -3.4% over the same 12-month period, according to the report by property investment data provider IPD.
There is now a 2.6% gap between returns from investment in property in regeneration areas and the UK average. This is 1.2% wider than in 2006, the report shows. To compile the report IPD took a sample of 659 properties worth £8.13billion in 37 areas of the UK.
But while short-term property returns have been hit harder by the recent market downturn than the UK average, long-term bricks and mortar investment in areas with regeneration schemes are still a solid option, the report says.
Over the medium and longer term, total returns from regeneration areas are identical to the broader UK as a whole, the report says.
André Gibbs, from property developer Argent, said: "We feel that the Index has already gone a long way to demonstrating to institutional investors that property investments across some of the UK's most deprived areas can show returns equal to investing in core locations."
Tue, 12th Aug 2008