Investment in central London office buildings dropped by 52% quarter-on-quarter as deal making was slowed by nervousness over Britain's vote on whether to leave the EU, according to Lambert Smith Hampton, the commercial property agency that is part of the Countrywide.
Some £2.2bn of London offices changed hands in the first quarter of 2016, the lowest level for more than four years and down from £4.6bn in the final quarter of 2015. The total was almost a third below the average quarterly investment figure over the past decade, with overseas investor's in particular deferring from buying office sites in the capital, Lambert Smith Hampton said.
The fall in London contributed to a 42% year-on-year fall in overall investment into UK commercial property, to £11.7bn in the first three months of 2016. A slowdown was especially evident in February and March: January accounted for more than half of the first quarter's investment volume.
The drop comes at a time when the UK property market is widely thought to have peaked. The IPD benchmark index for the sector dropped 0.6% in March - its first fall in three years.
But the slowdown has been exacerbated by fears of a 'Brexit', particularly in London, where investors are worried that a decision to leave the EU would lead companies to rethink the size of their presence in the city.