An exclusive Europe Real Estate report by Dr. Karen Sieracki highlights the current trends on the UK property investment market for Q3 2015. While the market has seen strong performance at £20bn per quarter for the last three consecutive quarters, Q3 has shown sharply reduced activity at £12.1bn, the lowest level of activity for the first time since Q2 2013. This also marks the first time that UK institutions have seen net disinvestment for the first time since Q2 2015. UK unlisted property companies have now seen net disinvestment for 10 consecutive quarters.
At £4.4bn, UK institutions were the largest sellers, displacing overseas investors for the first time since Q4 2012. The largest overseas investor is the Far East at £1.7bn, removing the US from its position. For the first three quarters of 2015, Middle East investors were net disinvestors at -£500mn, reflecting the impact of cheaper oil on their economies.
Concerning specific market sectors, the UK office sector pulled ahead in Q3, making up 42% of total investments, followed distantly by other sectors at 11%, with the retail warehouse sector pulling into third at 10%.
Key deals in Q3 2015 included the £550bn forward purchase of One and Two Southbank Place, SE1 purchased by Almacantar from Braeburn Estates; the £437.2m (5.4% IY) purchase of the AUK Portfolio by Redefine International Plc from Aegon UK Property Fund; and the £400m purchase of the Kew Green hotel portfolio by HK CTS Metropark Hotels from Goldman Sachs/TPG Special.
For more information, see the full exclusive report available for download here.
