INVESTOR confidence in the property market has improved slightly, according to a new poll.

The latest UK Real Estate Investor Confidence Survey by Jones Lang LaSalle gave an index reading of 162 for the first quarter of 2011 against a reading of 152 for the final three months of last year.

London and the South East continued to dominate investor preferences, with 64% of respondents to the survey stating that these will be their main target regions this year.

However, this was a slight fall compared with the fourth quarter of 2010 – while there was a marginal increases in the proportion of investors looking to target regional centres such as Leeds, Manchester and Birmingham.

Mathew Atkinson, associate direct in Jones Lang LaSalle’s national investment team in West Yorkshire, said: “This mood of cautious optimism from our latest investor confidence survey reflects the mixed results from recent UK economic data which show that although economic pressures are not easing, the UK commercial property market remains attractive to investors.

“Whilst office investment volumes in Leeds, along with the key regional markets, were relatively weak in the first three months of the year as buyers continued to focus on Central London and the South East, we anticipate we will see rising activity in a wider range of markets this year.

“Increased competition for London assets and lack of supply in the capital, combined with strengthening market fundamentals for prime space, will drive investors – attracted by the diversification opportunities and total return potential – to broaden their horizons.

“This has the potential to encourage increased investor activity outside of London. That said, caution continues to surround secondary assets and investors remain highly selective in their acquisitions.”

Jeff Pearey, head of Jones Lang LaSalle’s West Yorkshire office, said: “Occupiers remain cautious with the majority continuing to assess the impact of the current economic conditions on their business. However, the new enquiries are slowly converting into lettings and we anticipate a far stronger second quarter.”