UK investment volumes have plunged by a third this year as the bull run enjoyed for the past five years fades.
Just £10.1bn traded during the first quarter – a 31.8% decrease on the same period last year and a 27.3% decrease on the quarterly average for the past three years, research by Cushman & Wakefield shows.
The upcoming vote on Britain’s EU membership on 23 June is prompting buyers and sellers to stall. The International Monetary Fund has downgraded its forecast for UK growth in 2016 from 2.2% to 1.9% due to the EU referendum, with the Bank of England adding it expected “some softening” as a result.
Jeremy Beckett, senior director of investment at Cushman & Wakefield, said: “We would expect Q2 to follow Q1 as this sentiment continues.” However, he added that there was “significant potential for a very strong H2 in the event of a vote to remain in Europe”.
The Brexit referendum is just one of a number headwinds the industry faces, and the slowdown is not only UK-oriented. JLL research shows that EMEA volumes were down 20% year-on-year to €40bn (£32bn) in the first quarter, and globally were down 17% to $154bn (£109bn).