Investors shift focus from central London to regions

UK investors spent 65% of their total £5.8bn purchases outside greater London in the first quarter of 2014. The latest figures from The Property Archive show investors bought £11.4bn of property, less than the £15.8bn in Q4 2013, but around the same level as in Q1 2013.

Central London investment fell as an overall percentage to 31%, from 45% in Q4 2013, and from Q3 and Q2 2013, when 55% of deals were in the capital. Q4 2013 deals included St Martins Property Corporation’s record £1.7bn acquisition of More London, SE1.

Karen Sieracki of Kaspar Associates said: “The search for higher yield will remain UK domestic investors’ main focus  as they look for opportunities outside London and parts of the South East.” Across the country, overseas investors invested £5.6bn, with US investors the most active subgroup, spending £1.7bn, followed by Far Eastern buyers, who deployed £1.6bn in total.

Q1 2014 was the first time the Irish were not in the top three main overseas sellers since 2009. The leading overseas sellers were also US investors, who sold £1.2bn of assets. Average initial yields fell in most regions except the south east and East Midlands.