Investment deals in the West End have plunged by 40% since the second quarter of the year, research by Savills has shown.

Turnover for the third quarter of the year was £520m over 20 deals bringing the total for the year to £2.4bn across 86 transactions.

In the third quarter of 2007 £2bn was spent in the West End.

The third quarter was hit by a deathly quiet summer off the back of an increasingly gloomy global economic stage.

‘The summer has been a very quiet period although things are likely to pick up in the run up to Christmas even though the economic news is getting no better,’ said Savills central London investment director Paul Cockburn. ‘Good assets are still selling albeit obviously at heavily discounted prices to a year ago.

‘Secondary is harder to trade as their risk premium increases and buyers use the opportunity to trade up to better quality.’

UK institutions accounted for 82% of sales in the quarter, with Hermes, bp Pensions Fund, ING, Scottish Widows and Aviva Investors particularly active, the investment report said.

Overseas companies have dominated the buying side accounting for 84% of turnover in the quarter.

German funds, Middle Eastern private investors and Asian investors have been particularly active.