Investment volumes in the South East office market were down by 67% year-on-year in the first quarter of 2024, according to research from Gerald Eve.
The company’s market analysis identified total spend of £183m across 19 transactions in Q1, compared with £563m transacted in the equivalent period last year. It is also 52% down on Q4 2023.
However, the number of transactions was down by just 11% year-on-year, which, the report suggests, points to smaller deals and reduced liquidity.
The report highlights strong demand for buildings with repurposing possibilities, with these accounting for 42% of all Q1 deals. It predicts that this will remain the case, particularly with changes to residential permitted development rights which came into effect on 5 March.
Gerald Eve capital markets partner Guy Freeman said: “Despite a slow start to the year, we anticipate that investor sentiment will continue to improve throughout 2024 as interest rate cuts materialise, the change in PDR regulations offer more opportunities and employees continue to return to the office.
“In certain markets, capital values have reached a point where high-quality, ESG-compliant refurbishments are now feasible again. This is positive for the market as it will ultimately improve occupational fundamentals.”
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