Investment in central London
office buildings was almost £3bn less over the last quarter compared to 2018,
figures from Avison Young show.
The figures say that £2.2bn
of purchases were agreed in the third quarter of 2019 compared to £5.1bn in the
same period in 2018.
Chris Gore, head of City transactions, London markets, at Avison Young, suggests uncertainty surrounding Brexit and the China/US relationship are prompting both buyers and sellers to hold back, although investors are still looking to invest. He said: “With global political and economic uncertainty relating to Brexit, the China/US trade war and ongoing pro-democracy protests, things are hanging in a delicate balance. No one wants to look stupid by over-paying or under-selling when the outcome remains unknown.” But he added “there remains a large wall of overseas capital that is holding off until better clarity emerges.”
There are of course many factors that might account for a £3bn investment gap like this, and basic fundamentals like supply and demand shouldn’t be overlooked. But as the report rightly points out uncertainty is a factor, if somewhat intangible, that can exert a great deal of influence on a market.