The northern city is the most undervalued spot for commercial property in the UK, with industrial sites up to 14 per cent below their fair market value for potential investors, and rents as well as capital values on course to rise, property consultancy DTZ claims.
Meanwhile, a typical London retail building is changing hands for 19.8 per cent more than the firm believes it is worth.
“However, there are still opportunities in the City, West End and Midtown office markets, which we think are around fair value,” said Fergus Hicks, global head of forecasting at DTZ.
British commercial properties are increasing in price in tandem with the broader economic growth, though the Bank of England estimates that values remain 37 per cent below their pre-financial crisis peak.
These sites are set to rise above their average fair values by the end of the year, DTZ believes.
However, the overall trend masks large differences across the country. Manchester retail buildings are an estimated 13.4 per cent below their fair value at present, while equivalent spots in Cardiff are already 5.4 per cent above this level.
Richard Yorke, head of UK research at the property company, said looming interest rate rises next year along with improving returns from tenants will help buoy demand for assets beyond the capital.
“A strengthening recovery in the UK economy provides the backdrop for rental uplift and we expect investor demand to remain buoyant in the near term, with buyers continuing to look for opportunities outside London,” he said.
“However with interest rates likely to rise in 2015, pushing bond yields higher, prime property will look less attractive in comparison.”