Our research specialists, working with our national and regional investment professionals, have released our UK Investment Quarterly report reflecting on Q2 2022. 


Investment in UK commercial property dipped in Q2 2022 as spending fell in all sectors, most notably in retail and industrial. 

£12.4bn was traded in Q2 2022. This was down 28% from a strong Q1 2022, 44% below the five-year quarterly average and was the weakest quarter for investment since Q1 2021. Notably, thanks to two strong previous quarters the rolling annual total remained 18% above the five-year average totalling £67.6bn. 

Unlike the previous quarter, investment was driven by the regional markets. Just under 55% of all investment (excluding portfolio deals) took place in the regions in Q2 2022, above the five-year average of 50%. The South East was the region which recorded the highest level of investment outside the capital with circa £1.1bn purchased in Q2 2022, followed by West Midlands with just under £800m.

Conversely, investment in London fell to 45.1% of the total, a notable decrease from 67% in Q1 2022 and below the five-year average of 50%. The “flight to quality” accelerated by the pandemic continued to be a theme in the capital, especially in the office sector. Overseas capital drove volumes in London and in the regions, accounting for a 59.7% share of the total investment, an increase from 54.9% in the previous quarter. 

Far eastern investors continued to be dominant in the capital, accounting for a 58% share of overseas investment in London. A strong figure for US investment in the regions was driven by one particular deal, with Sun Communities acquiring a portfolio of 40 holiday parks for £930m.

The office and alternative (student accommodation, hotel and leisure and healthcare) sectors accounted for the largest share of the quarterly total, with 41% and 20% respectively. Notably, investment in industrials accounted for just under 20% of the share, which was well below the 30% share in Q1.

Tight pricing amid economic uncertainty have prompted investors to reassess their risk assumptions. The sale to asking price differential was negative for the second quarter in a row in Q2 2022, with deals completed at a 2.63% discount from the asking price on average in the second quarter. That was a notable decrease from its recent peak of 2.1% paid above the asking price in Q4 2021 and below the 10-year average of 0.3%.

Source: Carter Jonas, Property Data, CoStar

Although all property types recorded weaker investment, offices remained relatively popular

Source: Carter Jonas, Property Data, CoStar

Source: Carter Jonas, Property Data, CoStar

Source: Carter Jonas, Property Data, CoStar


Office investment volumes fell by 10% quarter-on-quarter to £4.4bn in Q2 2022 and are 17% down on the five-year quarterly average as spending on Central London offices cooled. Unlike the previous quarter only one deal above £500m was recorded, the 75% stake in Paddington Central acquired by GIC Real Estate for £694m. In the regions, volumes were 60% up quarter-on-quarter with the South East recording the highest share of office spending. Notably, investment in life sciences properties accounted for about 15% of the total office investment in the quarter.



Industrial investment eased for a second consecutive quarter in Q2 2022 as the record surge during 2021 subsided further. Volumes fell to a two-year low of £2.1bn, with increasingly tight pricing amid limited availability a likely factor behind the slowdown. Several portfolio deals were completed, such as AXA’s acquisition of a logistics portfolio of 10 assets worth £391m and GLP UK Management’s purchase of four warehouses at International Business Park in London for £185m.



Retail investment volumes remain subdued as the impact of the cost-of-living crisis has further tempered investors’ confidence towards the sector. Retail investment fell by 54% quarter-on-quarter, totalling just under £850m, the weakest quarter for investment since Q2 2020. Yorkshire and the Humber recorded the highest share of retail investment outside London for the quarter accounting for 20%, followed by North West and South East, both with 13% of the total share. London accounted for just under 17% of the total. One of the largest deals for the quarter was the acquisition of the Liberty Shopping Centre in Romford for £80m by the Swiss based investor Redical Holdings.



Spending on the alternative sectors continued to slow sharply in Q2 2022. With £2bn spent, volumes were down 33% quarter-on-quarter but only 4% down year-on-year. The standout deal was the US-based REIT Sun Communities’ acquisition of a portfolio of 40 holiday parks from Park Holidays UK for £930m. 


Overseas Investment

Source: Carter Jonas, Property Data, CoStar

  • Overseas investment in UK commercial property in Q2 2022 totalled £6.2bn, down 24% quarter-on-quarter after an exceptional Q1. But at 59.7% of the total investment, the share from overseas remains above the 51% five-year quarterly average.

  • US investment cooled further in Q2 2022 following a strong second half of 2021. The amount spent by US investors fell 40% quarter-on-quarter to £1.7bn, the weakest total in eight quarters. Despite the weaker spending, American investors had the highest share of the total at 39%, thanks to the £930m acquisition of 40 holiday parks by Sun Communities. 

  • Spending by Far Eastern investors slowed in Q2 2022 compared to the previous quarter. Despite the weaker total of £1.7bn, Far Eastern investors had the second-highest share of total overseas investment at 38%, mostly spent inside the capital. Supporting this volume were several large deals, including the 75% stake in Paddington Central bought by GIC Real Estate for £694m and the acquisition of 2 London Wall Place by Kingboard for £293.6m. 

  • European investors were also active, spending just under £600m on commercial assets in Q2 2022. Notably, German investors were absent from the investment scene for the second quarter in a row, in contrast to the previous five years.


The outlook from Ali Rana, Head of National Investment

  • With the strong performance of Q1 now firmly in the rear-view mirror, deals have either stalled, been delayed until after the summer or are taking much longer to transact as any element of risk is forensically analysed and re-evaluated. 

  • Whilst we are expecting a quieter summer period than ‘normal’, we believe this will give way to an increase in transactional activity from September onwards.

  • Although the buyer pool is currently much smaller than it was a month ago, we expect investors to return to the market, with overseas buyers in particular eyeing up potential opportunities that are now presenting more value than of late. Debt-backed buyers, however, will find it increasingly difficult to compete as the cost of debt continues to rise.

  • We are not expecting yields in the industrial sector to shift back to peak levels, although buyers are likely to return with a more cautious view of genuine rental growth prospects.

  • We expect the flight to quality in the office sector to continue, particularly given the growing focus on buildings with strong ESG credentials, and this is where the highest prices are expected to be paid. The focus will centre on London and the top six regional cities.

  • The retail warehousing sector is still faring well with the weight of cash supporting pricing. We expect this trend to continue.


For further information on the investment market, please contact a member of our team.

Ali Rana
Partner - Head of National Investment
020 7062 3108 email me about Ali
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