Brexit fears have led to slowdown in central London investment, according to Cushman & Wakefield.
Investment activity totalled £3.8bn in Q1 of 2016, down from the previous quarter and the same point in 2015.
Central London volumes have fallen by more than a third quarter-on-quarter with around £1.9bn invested in both the West End and the City
While City & Docklands investment volumes halved quarter-on-quarter, and were 20% below the five-year quarterly average, West End volumes were down just 10% quarter-on-quarter and almost on a par with the five-year quarterly average.
Asian investors were shown to be the most active purchasers and the largest net investors during the quarter with more than £500m.
Europe and North America investment stood at £336m and £267m respectively.
James Beckham, head of London capital markets, Cushman & Wakefield, said: “Some potential purchasers of property are undoubtedly taking a cautious view, holding off decisions until a level of certainty returns to the market post-referendum.
“The positive effect has been a number of previously frustrated purchasers taking advantage of lower competition for stock to finally gain a foothold into the London property market, a good example being Pacific Eagle’s purchase of 71 Queen Victoria Street [EC4].”
Elaine Rossall, head of London markets research, Cushman & Wakefield, said: “We expect overall transaction volumes to be down in the second quarter in the run-up to the referendum. Many investors take a long view and will invest in what they perceive is the right asset at the right price.
“Already this quarter, we’ve seen Aldgate Tower change hands for £346m – a larger sum than any investment in central London during the first quarter of the year.”
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