UK investment transactions are expected to total between £22bn and £23bn by the end of 2009, representing a big pick-up in activity in the second half.
The Property Archive estimates that there were only £8.7bn of deals in the ﬁrst half. Julian Stocks, head of England capital markets at JLL, said: “It has been a year of two halves. The ﬁrst six months were characterised by low volumes, falling prices and worsening occupational markets.
“Then investor sentiment dramatically changed and conﬁdence formed over the summer, resulting in demand for stock outstripping supply, which led to higher prices and rising activity.” A ﬁnal ﬁgure of £22.5bn would be 10% up on 2008 and is comparable to investment levels in 2001, JLL said.
The agent hopes turnover will continue to increase and is predicting that transactions will total £30bn in 2010. Stocks said investors would remain conﬁdent that UK property – especially at the prime end of the market – offers an income return that compares well with other assets, and very low interest rates.
He said investors had already started to look at “opportunities that do not fulﬁl the criteria they were originally seeking, taking a view on income risk through shorter leases or considering towns or markets regarded as more secondary”.
JLL expects more stock to become available. “Prices have recovered enough for banks and other opportunistic sellers to take advantage of a rising market,” the ﬁrm says.