The value of property deals in the UK rose by more than two-thirds during the three months to July, as overseas investors continued to flock to the London real estate market.

Transactions hit £3.4bn during the second quarter of the year, up from £1.96bn for the previous three months and more than double the £1.45bn recorded in the same period a year earlier.

The sharp rise comes in spite of a moderate slowdown in the number of deals completed during the period, falling to 31 from 37 in the first three months of the year, according to research by Grant Thornton, the accountancy group.

“These figures show that when the assets are right the funding can be found – either for particularly high-quality assets or ones where the buyers can see opportunities to improve returns,” said Clare Hartnell, global head of property and construction at Grant Thornton.

Ms Hartnell added that investors were keen to cash in on the demand for new London offices from technology, media and telecommunications companies. The TMT sector is one of the fastest-growing groups of occupiers, with Amazon, Skype, Groupon and Google all signing up to new leases in the past few months.

“Recent interest suggests there is more activity to come for technology property assets,” Ms Hartnell said.

The London commercial property market has been propped up by interest from foreign investors, who have continued a spending spree in the capital in spite of the worsening economic situation in the eurozone. Domestic buyers, meanwhile, have been hampered by the lack of bank lending, which may fall further as changes to global banking regulation require lenders to increase the amount of capital held against loans secured on commercial property.

The swing toward overseas buyers has already reshaped property ownership in the City of London. In 2011, foreign investors owned more than half of all office buildings in the Square Mile – the first time domestic ownership was in the minority, according to Development Securities, the property company.

The depth of demand has helped fund a development boom in the capital. However, the shift in ownership has raised concerns among some within the property industry who believe the increased presence of long-term, institutional owners will make the market less liquid.

In spite of the spike in transaction values during the second quarter, the pace of dealmaking is unlikely to continue for the rest of the year.

Mike Prew, head of real estate at Jefferies, said: “The annual cash allocations to real estate tend to be made in the first quarter of the year and invested in the second to capture as much yield as possible through the year.”

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