Just £1.63bn was invested across the City of London, Docklands and West End, down significantly from the £3.096bn in the final quarter of 2009. It is the first quarterly fall in nearly a year.
Clive Bull, head of central London investment at the company, said the uncertainty around the upcoming election was making investors nervous about committing to deals. He added that the outlook for Q2 is considerably healthier with a number of key properties already under offer and over £2bn of property now available on the market.
“The start of the year was marked by a distinct shortage of opportunities but toward the end of March the number of investment opportunities has increased substantially,” said Bill Tyser, head of City investment, Cushman & Wakefield, said.
But question marks remain over whether investors will spend in quarter two, especially for high-end deals worth in excess of £200m. The first quarter also saw a drop off in investment from overseas investors who took advantage of the weakness of sterling. UK investors accounted for 60 per cent of City and Docklands investment in the first quarter, against 90 per cent from overseas investors at the end of last year.