Institutional investment in property declined in the fourth quarter of 2000 to £979m, according to figures released by the Office for National Statistics.
The figure is £2bn down on the previous three months but the full net year investment totalled £6.1bn - the highest level recorded in real terms.
CB Hillier Parker head of investment Greg Nicholson said: “The fundamentals of the UK property investment market remain sound. The economy is in the midst of an unprecedented period of post-war growth with 33 consecutive quarters of expansion. This combined with a restrained supply of good quality new buildings has driven up rents across all sectors.”
Nicholson believed that the drop in investment was partly because institutions had invested heavily in the first half of 2000 in order to get full benefit from high levels of rental growth. An increase in transaction costs and rising investment yields had also had an effect, Nicholson said.
“We believe that rental value growth will continue although the ability to identify those markets offering the best opportunities for growth will become increasingly crucial.”
By Alistair Graham
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