The report reveals that:
- At £11.9bn, Q1 volume appeared robust given the level of speculation and uncertainty around June’s Referendum on the UK’s membership of the EU. While investment was down 26% on the previous quarter it was closely in line with the five-year quarterly average.
- However, 50% of Q1’s volume was in January, indicating that market sentiment changed during the quarter in preparation for the Referendum. This was most evident among institutions, where 70% of their Q1 activity took place in January.
- Pricing held firm during Q1 despite increasing caution. The average all Property transaction yield moved in by 13 basis points to 5.49% during Q1, while prime yields remained broadly steady.
- Central London offices bore the brunt, with Q1 volume of £2.2bn substantially down on Q4 2015’s £4.6bn and the lowest since Q4 2011. Meanwhile, UK industrial volume increased quarter-on-quarter and stood 24% above the quarterly average.
- Overseas buyers largely accounted for the fall, with volume halving quarter-on-quarter to £4.7bn, its lowest since Q3 2013. In contrast, activity from private and listed companies rose quarter-on-quarter and was ahead of average.
- Activity in the UK regions held up well, with volume outside London reaching £4.5bn in Q1, up 16% on the five-year average. While overseas investment fell sharply in London, it was 65% above the quarterly average across the rest of the UK.