Bath Estate Agents

Investment Quarterly Q1 2024

Our research specialists, working with our national and regional investment professionals, have released the latest Carter Jonas UK Investment Quarterly report for Q1 2024.

Investment in UK commercial property fell in Q1 2024 across office and industrial sectors. In contrast, activity in the alternative sectors saw a notable uptick quarter on quarter. 

Source: Carter Jonas, RCA, CoStar

£8.1bn was traded in Q1 2024. This was down 14% quarter-on-quarter, down 25% year-on-year and 40% below the five-year quarterly average. The rolling annual total also fell notably to £34bn compared to the previous eight quarters and was 37% below the five-year average of £55.3bn. 
Source: Carter Jonas, RCA, CoStar 

Just over 45% of all investment (excluding multi-regional portfolio deals) occurred in the capital in Q1 2024, which is below the five-year average of 52%. Investors targeted assets in the living sectors, such as hotels and built-to-rent. Overseas capital continued to support volumes in London, accounting for 66% of the total.

Conversely, investment in the regional markets (UK excluding London) accounted for 55% of the total, above the nearly 40% recorded in Q4 2024.. The North West was the region that recorded the highest level of investment outside the capital, with circa £660m purchased in Q1 2024, followed by the South East with just under £400m.

Source: Carter Jonas, RCA, CoStar

The alternative sectors accounted for the largest share of the quarterly UK total at 51% and recorded volumes closer to the five-year quarterly average than any other sector. The office sector accounted for 20% of the total, whilst industrial amounted to just 16% and retail accounted for 12%. 
Source: Carter Jonas, RCA, CoStar


Office investment volumes eased to £1.6bn in the first quarter, down 12% quarter-on-quarter and 54% below the five-year quarterly average, as spending on regional offices cooled. No deals above £500m were recorded in Q1 2024, with only one deal above £200 million being completed. 

Despite the overall weaker investment outside London, there were some large transactions outside the capital. Bristol recorded some of the largest deals in the first quarter. Hampshire County Council Pension Fund acquired the newly developed Halo building in Finzels Reach for £71m, a 5.8% net initial yield, BNF Capital and Morgan Capital purchased the Programme building for £36.5m, while Northtree Investment Management bought 121 Winterstoke Road for £33.8m, reflecting a 7.9% yield. 

The largest deal of the quarter was in London. A joint venture between Elliott Management Corporation and Oval Real Estate acquired a portfolio of 27 properties in London’s West End for £302m, reflecting a net initial yield of 4.81%. 


Industrial investment decreased by 44% quarter-on-quarter in Q1 2024 to about £1.3bn. The largest deal was Ares Management’s acquisition of Royal London Asset Management's 1.2m sq ft UK portfolio of industrial and logistics assets for £200m. Another notable deal was the acquisition of the 733,000 sq ft Mountpark Warrington Omega II by a joint venture between KKR and Mirastar for circa £100m. 


Retail investment remained stable in the first quarter. At nearly £1bn, retail investment was in line with the previous quarter, but 49% below its five-year quarterly average. Several sizeable retail parks, shopping centres and supermarket deals supported volumes in the first quarter of 2024. M&G Investments acquired a portfolio of 11 Waitrose supermarkets for £125m, while Lodge Quay purchased two Morrisons supermarkets and associated petrol stations for £45m. Elsewhere, Lone Star acquired Union Square in Aberdeen for £111m, reflecting a net initial yield of 11%. 


Spending on the alternative sectors surged in Q1 2024,. With £4.1bn transacted, volumes were up 35% quarter-on-quarter, 30% up year-on-year and 17% above the five-year quarterly average. Several hotel and built-to-rent deals were completed in the first quarter. For example, Starwood Capital Group acquired a portfolio of ten Radisson Blu Edwardian hotels for circa £800m, while Sun Venture bought the Hyatt Place London City East hotel for £100m, reflecting a net initial yield of 5.1%. Elsewhere, KKR acquired two high-quality, Build-to-Rent (BTR) buildings from Quintain, for circa £250m.

Overseas Investment

Source: Carter Jonas, RCA, CoStar

Overseas investment in UK commercial property totalled £3.6bn in Q1 2024, down 51% quarter-on-quarter and 31% below the five-year quarterly average. As a percentage of the total investment, it accounted for 45%, below the 10-year average of 51.8%.

US investors had the highest share of overseas investment in Q1 2024, totalling around £3bn, a marginal increase of 3% quarter-on-quarter but 11% above the five-year quarterly average. Notable deals include Starwood Capital's acquisition of a hotel portfolio comprising ten hotels for £800m and KKR’s acquisition of two build-to-rent developments in Wembley Park for circa £250m.

Far Eastern investors, historically among the most active overseas investors in UK commercial properties, spent just around £200m, well below the 5-year quarterly average of £640m. Notable deals include Nomura’s acquisition of 55 St. James’s Street for £63.4m, reflecting a net initial yield of 4.3% and Imabari Shipbuilding’s purchase of 52 Bedford Row for £30m.  

The outlook from Ali Rana, Head of National Investment

The UK commercial property investment outlook displays signs of improvement. Recent economic data indicates a decline in inflation, suggesting a potential easing of interest rates by the Bank of England. While a less aggressive stance by the US Fed remains uncertain, lower interest rates in the UK, alongside currently reduced asset prices, could stimulate renewed investment activity. This presents opportunities, such as repositioning secondary offices or pursuing alternative uses, mainly living sector conversions encouraged by recent changes to Permitted Development Rights.

Demand for prime London office space with strong ESG credentials remains high, creating a robust occupational market. Given the yield differential, interest in regional offices is also on the rise. The industrial sector continues to attract substantial investor interest against a backdrop of limited stock, likely driving further yield compression. 

Investors are keen to capitalise on the current pricing environment before interest rates change and competition for assets intensifies, although remaining mindful of potential external risks stemming from geopolitical tensions.

Our contributors

Ali Rana
Partner - Head of National Investment
020 7062 3108 email me
Rad Radev
Associate Research Analyst
020 7518 3270 email me