Ezra Nahome, national head of investments at LSH, said the fall was connected to the slump on the equities market. 'Because of how the equity markets have fallen institutional investors have become more cautious. The proportion of property ownership has increased--becoming too high in many cases. Many UK funds have been caught wanting to buy but not being able to because they are already too overweight in property,' he says.

Analysing the market over the first five months of 2001, LSH identified a growing trend towards larger deals. The firm logged 14 deals over £100 million ($141 million) with a combined value of £2.5 billion ($3.5 billion--more than a third of the total market volume of £7.8 billion ($11 billion). The LSH report suggests this trend has been driven by the desire of property owners to have assets with critical mass. This has been facilitiated by the ready availability of equity and debt and a new willingness among financial institutions to utilise gearing through limited partnerships.

Key deals included the Peabody Group's £300 million ($423 million) purchase of the Cutlers Gardens estate in the City from Standard Life and Scottish Widows' £285 million purchase of the Bedfont Laes business park near Heathrow Airport from MEPC.