Commercial landlords are expecting the North and East Midlands to provide the biggest development opportunities in the UK over the next two years, a study by Together reveals.
Nearly two in five (39%) landlords identified East Midlands as the best region for investment, followed by the North East and North West at 37%.
Government-backed initiatives which aim to boost the areas economically have had an impact on landlord sentiment, with 47% of landlords reporting that the Northern Powerhouse has made them more positive about the North whilst 40% say the Midlands Engine increased confidence in the region.
Just 8% of landlords believed that the South East and East Anglia offered the best development opportunities, with 3% opting for the South West.
The capital attracted interest from over a third (36%) of commercial landlords.
Andrew Charnley, head of corporate relationships at Together, said: “The North of England and the Midlands are attracting interest from commercial landlords who can see real opportunities to expand over the next two years.
“The Northern Powerhouse and Midlands Engine initiative are playing a part in helping to boost both areas, but landlords are very focused on where they see the opportunities with differences in which sectors are seen as offering the best chances for developments.
“That underlines the need for lenders who do not take a ‘one size fits all’ approach and are willing to be flexible in responding to what are often very tight deadlines for funding to be agreed.”
The best-performing sectors in the Midlands and North are likely to be office developments and flats according to the survey.
However, landlords see strong opportunities in semi-commercial developments in the North and in retail in the Midlands.
The study, which questioned a national panel of commercial landlords about their economic confidence in the UK, also found more than two out of five plan major increases in investment in the Midlands over the next two years while 40% will substantially boost their presence across the North of England.
The best-performing sectors in the Midlands and North are likely to be office developments and flats. In the North landlords are more bullish about office developments – nearly half (49%) see offices as the best sector compared with 44% in the Midlands.
Landlords believe flats will be strong sectors in both regions – 41% chose the sector in the North and 40% in the Midlands. But there are differences with landlords seeing strong opportunities in semi-commercial developments in the North and in retail in the Midlands.