Investors have been told to expect a bumper first quarter for London real estate investment in 2021, after slowing market activity due to the second wave of the Covid-19 pandemic.
Faisal Durrani, head of London commercial research at Knight Frank, told the City Property Association’s market update webinar that although many investors put decisions on hold as a result of the second lockdown, the floodgates could open on the back of positive news about a Covid-19 vaccine.
“Since the start of the pandemic we know that investors for the most part have been sitting on their hands – this means that they have amassed a significant amount of dry powder,” Durrani said.
“With the news of the vaccine roll-out, which is expected to start happening from the first quarter of next year, we expect that Q1 will be the mother of all quarters in terms of investment activity, as investors start to deploy that capital.”
Durrani’s bullish prediction came after a year of depressed activity in both real estate and the wider investment market.
During the third quarter London saw less than £1.3bn of investment turnover, according to Knight Frank data, which compares to a long-term average of £3.4bn.
But the third quarter still featured around double the amount of investment activity as the second, which Durrani said was down to the lifting of lockdown travel restrictions over the summer.
In October, Savills said that investment volumes were down by 46% year-on-year for central London’s commercial property market, with just £4.4bn transacted by the end of the third quarter.
