Investment in London’s office market has remained steady in the first quarter of this year, despite fears that Brexit uncertainty may hit investment volumes.
The figures, released today by real estate consultancy firm CBRE, show a total of £3.5bn-worth of investments in London office space in Q1, down 14% on what was a strong Q4 of 2015, but remaining relatively static year-on-year.
However, the report predicts that investment will slow in Q2 as a result of uncertainty surrounding June’s EU referendum, before rebounding in the second half of the year as long as Britain remains in the EU.
It was also mixed news on the type of transactions that went through, with the total number of transactions in the first three months of the year standing at 43, the lowest since 2010; however, the quarter still saw the highest ever number of deals worth more than £100m since CBRE began collating figures all the way back in 1985.
The figures also underline the continued importance of international investors to the capital’s office market, as overseas buyers were involved in 67% of all transactions
Jamie Pope, Head of London Capital Markets, said: “Some investors are experiencing a degree of political and economic uncertainty at the moment, so it’s heartening to report that this hasn’t caused much in the way of turbulence in the London office market in the first quarter of the year.
"Yields are stable, and the prevailing conditions are in some cases making investment at this time a more attractive prospect.
“Nevertheless, we are already seeing some buyers hold off on deals until they know the result of June’s EU vote, so we expect to see Q2’s transaction volumes dip, before bouncing back in the second half of the year, provided Britain stays in the EU.“
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