Commercial property investment in the City of London and the West End markets has slowed in the first quarter of 2018, according to research from real estate adviser Savills.
Savills’ figures show that the City’s turnover in the first quarter reached £1.37bn across 20 transactions, a decline of 11 per cent on the 10-year first quarter average of £1.54bn.
The West End also saw a subdued start to the year, with with turnover for the first three months of 2018 totalling £1.07bn over a total of 24 transactions, 17 per cent below the 10-year first quarter average.
However, Savills suggests that demand for property in these areas remains high: rather, it is a lack of supply that is depressing turnover in the first quarter.
“With investor interest remaining high, the lack of available stock is likely to continue to frustrate both Central London markets,” said Stephen Down, executive director at Savills. “The supply/demand imbalance is particularly evident at the lower price points, where there is a wide pool of investors, both foreign and domestic, hunting for stock.”
According to Savills, there is currently £3bn worth of assets under offer in the City market, but a lack of available stock is compressing volumes. Meanwhile, the current supply/demand imbalance in the West End is showing no sign of abating.
The report from Savills comes after research published by the property company yesterday showed a considerable increase in the amount of technology companies choosing to lease property in the City, as opposed to more fringe areas like the so-called Silicon Roundabout.
The research showed that tech firms have committed to nearly three times as much office space in the City compared to areas like Shoreditch and South Bank