March investment volumes reached £4.5 billion, up from £3.9 billion transacted in February according to Colliers.

The Q1 figure therefore stands at £13 billion, up 10 per cent on the corresponding 2021 figure and in line with the 10-year Q1 average.

Cross border capital accounted for almost 60 per cent of all activity during the quarter. US and Asia-Pac investors were particularly acquisitive as the easing of travel restrictions is bringing global capital into the UK market.

March's three largest deals by value were London office 5 Broadgate (£1.2 billion), a logistics portfolio (£550 million) and a student accommodation portfolio (£306 million). Yields are compressing across most sectors, especially for prime assets in prime locations.

Oliver Kolodseike, head of Economic Research at Colliers, said: "The first quarter of the year has seen investment levels largely get back to pre-pandemic levels across the various sectors. The current headwinds of inflation, interest rates and the rising cost of living will no doubt have an impact on the Q2 features, particularly for retail as demand for goods may drop.

"Despite this, there is a significant weight of capital looking to enter the UK real estate market and I'd not expect there to be a drop off in investment levels this year."

Just over £2 billion was transacted in the office sector during March, building on the £2 billion and £1.2 billion recorded in January and February, respectively. Excluding traditionally strong fourth quarters, the £5.2 billion transacted in Q1 was the best quarterly figure since 2018.

Around £1.3 billion was transacted in the industrial sector in March, up from £1 billion in February and higher than the large majority of any monthly figures pre-Covid.

Monthly retail investment volumes slowed from an already weak £300 million in February to just £170 million in March, the weakest monthly figure since April 2020. Nonetheless, the Q1 figure of £1.4 billion is an improvement on both 2020 (£1.1billion) and 2021 (£1.2 billion) levels thanks to a strong January.

Around £930 million was invested in the alternative and mixed-use segments in March, down marginally from the £1.1 billion transacted in February. The purpose-built student accommodation (PBSA) sector attracted £430 million, up from £260 million in the previous month.

Paddy Allen, head of Operational Capital Markets at Colliers, added: "Investment into PBSA almost doubled between February and March as the sector continues to be popular with global capital looking to increase exposure to 'beds' backed sectors.

"We are seeing increasing levels of dry powder looking to build scale across PBSA and Build to Rent, with the resilience and favourable demand and supply imbalances continuing to make PBSA a primary focus for investors."