Activity in the South East office investment market fell in the first quarter of this year due to “investor caution amid economic head winds and geopolitical uncertainty,” according to the latest research from Gerald Eve.
In its latest South East Office Investment Bulletin the company reported the total transaction volume in Q1 2023 was £563m, down 8% on Q4 2022 (£614m), and up 10% on Q1 2022 (£513m). PIC’s £267.7m forward purchase of the long-leased Government Property Agency Hub at Ruskin Square, in Croydon, accounted for just under 50% of the Q1 transaction volume.
In addition to the lack of larger transactions in Q1, deal volumes fell with 21 transactions recorded in the first quarter versus 33 in Q4 last year.
Josh Shaffer of Gerald Eve said: “Q1 2023 saw the buyer pool for assets widen with a number of new entrants. There was an increased number of smaller transactions, dominated by cash buyers who were both private investors and property companies. They accounted for almost 40% of the transactions but notably only 16% of the total volume.”
The company said £632m of stock is currently under offer, reflecting a 1% decrease on Q4 2022, with major assets under offer including M&G’s 3 Forbury Place in Reading and Sutton Council’s disposal of the Oxfam HQ in Oxford.
Guy Freeman of Gerald Eve said: “Occupier activity remains sensitive to geopolitical and economic stability however there are several live 50,000 sq ft plus requirements that once committed, should show continued Grade A headline rental growth as more markets break the £40/sq ft barrier.”
