The number of commercial properties sold at auction slowed at the beginning of this year, research by the Royal Institution of Chartered Surveyors reveals.
RICS says this reflects a slowdown in investment across the broader commercial landscape.
Sales dropped by 26% from one quarter to the next, with 1,402 properties sold in the last quarter of 2006 compared to 1,038 in the first quarter of this year.
The success rate for commercial properties sold at auction dropped to 69%, down from 73% in the previous quarter.
Oliver Gilmartin, senior economist at RICS, says: “The bull market run in commercial property is coming to an end.
“Fewer sales at auction reflect investor caution for commercial property, as yields have fallen below those of more liquid asset classes.
“Equity markets are in vogue, as optimism grows that a recovery in the Euro area and Japan will maintain global economic expansion.”
He says that investors focusing on equity markets need to remember the lessons learned in the past year as rising interest rates in Japan and the sub-prime mortgage crisis quickly raised global stock market volatility.
Gilmartin adds: “Reaction to Japanese monetary decisions caused ripples in global investment flows which spilled over into equity markets.
“With further rate rises in Japan expected for August, defensive asset classes, like commercial property, may still play a part in adding stability to investment portfolios whilst protecting against unexpected inflation scares.”