THE total value of commercial property investment transactions across the North East decreased dramatically in the last three months of 2011.

The deal value fell to £28m from £109.7m in the previous quarter, according to the latest research, UK Investment Transactions Q4 2011, by national commercial property firm Lambert Smith Hampton.

It compared with £52.6m in the same period a year earlier.

Across the region, £233.8m of transactions were recorded in 2011 as a whole, a 44% decrease from 2010’s figure of £420.1m.

The most significant deals to take place during the quarter included Cobolt 16’s acquisition of Silverlink North for £24.2m and the acquisition of Waterside House in Sunderland for £3.37m by the Topland Group.

The office sector, which accounted for zero of total market activity in Q3 increased to £25.7m, accounting for 92% of activity in Q4.

The retail sector fell from 99.7% to 3.6% in Q4, with the industrial sector accounting for 4% of market activity in Q4. Overall, 2011 total figure of £233.8 showed a 44% decrease on 2010’s figure of £420.1m. In 2011, the office sector fell 64% from £131.9m to £47.6m.

The industrial sector remained stable at £163.7m compared to £154.6m in 2010 - with the retail sector falling from £83.2m in 2010 to £12.6m in 2011; a drop of 80.4%.

Abid Jaffry, head of capital markets within LSH’s Northern Investment team, said: “The level of available stock within the North East has been very thin over the last quarter with only one notable transaction.

“This is indicative of turbulent financial markets which have had a knock on effect on property where a cautious view by investors has meant a lack of transactional activity.

“The reaction has been similar in several other regional centres and it will be interesting to see how sentiment and confidence will affect the local market in 2012.”

Focusing on the UK as a whole, the outward yield shift recorded for central London offices in Q4 2011 is a clear sign that the price has peaked and a period of consolidation is going to follow. Central London offices yields for Q4 2011 moved out to 5.62% from 4.9% in Q4.

In the regional markets, the South East was the most active in 2011, attracting 13% of the annual investment volume.