Knight Frank has reported that deals completed in the West End during the first quarter of 2018 fell by 64% compared to the same period last year, down to £765 million from the £2.1 billion completed in Q1 2017.

Average deal size also fell, from £107 million to £51 million, and the number of transactions went down from 20 to 15. In fact, the amount of revenue brought in was primarily from just two transactions – acquisitions of 30 Broadwick Street and Regents Quarter for £190 million and £300 million, respectively.

However, things may not be as gloomy as they appear: Head of West End capital markets at Knight Frank Anthony Barnard has explained that this is not so much a sign of waning buyer interest but more a sign of reduced availability, and indeed a competitive market: “There is strong competitive pressure, particularly for good quality assets below £100m, so as a result we are seeing premium prices being paid for these types of opportunities… On the face of it, a fall in capital turnover could be viewed as a sign of the market softening, however, we are still witnessing unprecedented demand from Asian, Middle Eastern and European capital together with the re-emergence of the UK buyers.”

This news was brought to you by Morgan Pryce, a specialist tenant acquisition agent with offices in Oxford Circus and the City. Morgan Pryce specialises in search, negotiation and project management and works exclusively for tenants.