International property services firm Jones Lang LaSalle (JLL) estimates that direct real estate investment activity in the UK during the third quarter of 2008 stood at circa £5bn (EUR 6.3 bn), slightly below the £6bn recorded in the previous quarter. This translates into a year to date total of £18bn, a 58% drop compared to the same period last year. The report found that this mainly due to the lack of available finance impacting on large lot size deals, which is affecting the central London and shopping centre markets in particular.
International property services firm Jones Lang LaSalle (JLL) estimates that direct real estate investment activity in the UK during the third quarter of 2008 stood at circa £5bn (EUR 6.3 bn), slightly below the £6bn recorded in the previous quarter. This translates into a year to date total of £18bn, a 58% drop compared to the same period last year. The report found that this mainly due to the lack of available finance impacting on large lot size deals, which is affecting the central London and shopping centre markets in particular.
Although volumes have fallen significantly, a number of notable deals completed over the last three months. These included the sale of the 'Project Swan' portfolio for £364.5 mln which was acquired by Henderson Investors and the acquisition of Moorhouse, London EC2, which was purchased by Deka Immobilien for £230 mln.
Offices remain the preferred sector amongst investors, accounting for nearly 50% of all transactions, followed by the retail sector at around 30% over the nine months to September 2008.
Overseas investors combined with private individuals have been the major net buyers in the UK market recording net investment of £6 bn over the first three quarters of 2008. On the other side of the transaction, listed REITs and UK institutions were the major sellers with net disinvestment of £2.3 bn and £1.4 bn respectively.
