Economic nervousness and an inability to agree on pricing has seen the volume of pulled deals in the UK soar to a new high.
According to data from MSCI Real Assets, some 54 real estate deals were pulled in the first three months of 2024 in the UK.
It is the highest quarterly deals failure count since 2016, and totals more than full-year figures for 2016, 2017 and 2020. The count of deals that were either pulled or failed in those years were 49, 42, 36 and 54 respectively.
The average Q1 deals failure count since 2016 amounts to less than 15 deals, putting Q1 2024 more than three times ahead of the average.
The UK also led the rest of Europe in deals failure count, with 42 pulled deals in Western Europe and 14 in Central Eastern Europe during the first three months of the year.
MSCI said the spike in the number of deals being terminated and for-sale properties being pulled from the market was a sign of continued uncertainty in the market.
Another explanation for the rise in for-sale properties being pulled from the market, it said, was the anticipation that central banks will start to reduce interest rates by the summer.
Despite sales being pulled or failing in Q1, there is evidence that not all stalled sales stay stalled forever. CLS’s resurrection of its disposal of Westminster Tower at 3 Albert Embankment, SE1. The landlord had agreed to sell the property to Australian investor Third.i in June 2023 for around £40m, but was forced to abandon the sale when Third.i’s investor pulled out. Earlier this month, it secured a sale to London Square at a similar price.
Across both the UK and the wider European market, the volume of pulled sales has been steadily increasing since the global financial crisis. In Q1 2016 some 40 deals were pulled, compared with 110 pulled in Q1 2024.
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