The number of deals completed within the UK commercial property sector fell to its lowest point in more than two years during the final quarter of this year, a new report has confirmed.

Coming on the back of several recent announcements by UK property fund managers that they are to slash the values of their commercial portfolios, new data from Cushman & Wakefield shows that just £2.3 billion worth of transactions took place over this latest three month period.

In comparison, deals carried out over the third quarter of the year totalled around £6 billion.

Worst hit by the declining investor confidence in the sector was the City of London, where transaction volumes fell from £4.3 billion to just £1.7 billion over the same period.

Commenting on the figures, Cushman & Wakefield chairman Tim Sketchley said: "While we go into the beginning of 2008 with concerns as to where the short- and medium-term market is going, there are good signs that the market is continuing to move forward with a very low vacancy rate."

Just recently life insurance group Friends Provident announced a freeze on its £1.2 billion commercial property fund following a growing demand from investors looking to withdraw from it.