Investment in the UK office market outside central London reached £8.35 bn (€10.8 bn) in 2015, according to a report from Cushman & Wakefield.

Investment in the UK office market outside central London reached £8.35 bn (€10.8 bn) in 2015, according to a report from Cushman & Wakefield.

There was a strong first half to 2015, with £4.53 bn of investment transactions, which was a 49% increase on H1 2014. However, activity slowed in the second half of 2015 and was down 29% on the same period in 2014.

UK institutions saw their investment volumes exceed £3.3 bn during 2015, but their market share slipped by 10% over the year to 40%, with a number of investors poised to dispose of assets in locations where they have already achieved the returns they require.

In contrast, appetite from overseas investors remained strong in 2015. A total of £1.83 bn completed - equal to 22% of all UK transactions - with any interest outside London mostly confined to the South East and best regional alternatives where occupational demand strengthened.

Looking ahead, C&W said there is a healthy investment pipeline with £1.3 bn of assets under offer and £600 mln available, which, if concluded, could bolster Q1 2016 figures. Further investment opportunities will become available during the second quarter, as unsold portfolios are dismantled into smaller-sized opportunities and where asset management objectives have been fulfilled on recently purchased assets.

'While there has been stock coming forward, generally speaking, there has been limited pressure on landlords to sell. Institutions have been taking a back seat on the buy side despite having cash to spend, which may halt the downward pressure on yields for the time being,' said Chris Lewis, partner of business space investment at Cushman & Wakefield.

'However, as 2016 progresses there will be more pressure to deploy cash, while economic uncertainties, such as those associated with Brexit, may unnerve some parties into selling, opening up additional investment opportunities. With a healthy pipeline of space currently under offer we expect to see investment volumes gather pace through the year.'