PROPERTY INVESTMENT IN URBAN REGENERATION PROPERTY MARKET

Abstract

Investors need to have confidence in the maturity of the market in terms of transparency of returns and risks. These attributes normally characterize the prime property markets whereas urban regeneration locations, in contrast, generally display evidence of market failure. To varying degrees there is a lack of investor confidence reflecting an opaque rather than a transparent market, inadequate information on returns and risks, barriers to the availability of finance and uncertainty regarding the liquidity of assets. This research discusses why institutional investors choose to invest in an urban regeneration property market in the United Kingdom (UK). The central core of the research investigates investment behaviour and draws upon results of an independent survey cohort namely private sector actors who invest in urban regeneration. The analyses comprise profiling the nature of the investors' portfolio and degree of exposure to property investment, including the degree of diversification by property type and regional location within the UK. Motivations for holding property investment portfolios and decision-making criteria are analyzed as well. To substantiate the survey findings, property performance indices such as the Investment Property Databank (IPD) and the Eight City All Property Regeneration Index have been used to measure commercial property performance. The research results show that market factors are the primary influences on decision¬ making and that over the long-term, the outcomes of regeneration are good and that investment returns within regeneration areas exceed national and local benchmarks inferring that investor perception has been misplaced.