South East Office Investment Q4 2022
We have pleasure in providing you with our Q4 2022 South East Office Investment Report.
Q4 saw a total £922 million invested into the South East Office market. This was in 41 transactions at an average deal size of £22.5million.
The four largest transactions (all in the Life Sciences sector) accounted for 45% of the £922 million.
For the 41 transactions there were 35 different buyers; only two parties transacted on more than one asset in the quarter.
Transaction volumes were up 19% on Q3 2022 but down 49% on the same quarter last year.
We continue to see yields for both prime and secondary assets moving out and demand from investors across the sector is generally thin. However, there are encouraging signs of sentiment improving and there remains a good appetite to deploy capital in the sector at rebased values.
In terms of availability, there is approx. £1.78bn on the market going into Q1 2023. Over £500 million of sales have been officially withdrawn having failed to reach the price.
An additional £593 million is under offer due to complete in Q1.
There continues to be a reduction in the number of offices selling for alternate uses such as industrial or residential. This is a reflection on there being fewer buildings with existing Permitted Development rights for conversion to residential, and the softening of industrial yields combined with increasing build costs which has made this sector less competitive.
We hope you find this research helpful and informative. Please do not hesitate to contact the Bray Fox Smith team to discuss the market in more detail, and we would welcome the opportunity to advise on any specific assets held within your portfolios.
