Knight Frank toasts best year ever as life returns to commercial real estate market

Knight Frank's office at Bond Court, Leeds

The global consultancy, which also has an office in Harrogate, reported a 19 per cent rise in group profits to a record £162m for the year ending March 2015. Turnover rose 13 per cent to £443m.

Yorkshire deal highlights include the sale of Sterling Capitol’s Tesco distribution centre at Goole for £47.1m.

Alistair Elliott, group chairman and senior partner of Knight Frank, said: “In the UK, commercial real estate activity has increased and there is now significant life in the sector.

“Our 10 commercial offices across the UK have had their best year ever.

“The residential market is more mixed, with the prime sector still absorbing the changes to stamp duty made last December, especially in central London.

“That said, the market continues to be underpinned by a combination of undersupply of housing, the improving economy and the low interest rate environment.”

He added: “In Europe, fortunes are varied. This reflects the reality of the multi-speed markets across the Eurozone. Dublin and Madrid have outperformed while the French and German markets remain mixed. With the exception of Russia, the real estate markets in Central and Eastern Europe remain strong.”

Mr Elliott said activity in commercial occupier markets is increasing in many cities around the world and the return of rental growth is drawing more investor interest.

He added: “For many investors, total returns still represent fair value. As yields harden further, we believe this will culminate in an increasingly active development market with investors focussing on development returns to counterbalance the flatter yield profile.

“Cross-border growth in residential development and investment continues. While some of this activity relates to portfolio and risk diversification, it is mainly a reflection of the closer economic interdependence of our key markets.

“Our presence in prime locations across London and our enhanced coverage of New York, Miami, LA and Sydney has helped cement our offering to clients looking to access the world’s leading employment centres.”