London’s office investment market plummeted by a third in Q1 as investors deferred decisions ahead of an EU referendum vote and wider economic woes bit.
Total investment volumes in the capital of £3.5bn were down by 10% on Q1 2015, and declined by 32% on Q4 2015, according to figures from EGi London Offices Research. The fall echoes a 31.8% fall in UK wide investment volumes.
Nearly half of all cash was placed in the West End with £1.6bn invested in the sub market. Notable deals for the quarter include the sale of the Thomas More Square Estate, E1, which Resolution bought from Land Securities for £300m and Grosvenor’s sale of Almack House in St James’, SW1, for £225m to Pontegadea, a global real estate investment firm.
The capital’s leasing market fared better with office take-up rising 6.2% to 3.1m sq ft, above the five-year Q1 average of 2.6m sq ft. But fears are mounting for Q2 figures.
“If I was a betting man, I expect in Q2 the leasing market will catch up with the investment market,” said James Roberts, chief economist at Knight Frank.
“The investment market can very quickly respond to events, whereas the leasing market is shaped by a lot of other considerations,” he added.
London’s top agents will be revealed by EGi London Offices Research’s on 28 April along with a full analysis of the capital’s investment and leasing markets. Click here to attend the free event.
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