Investment activity remains subdued across the market, with volumes reaching £1.8 billion for the first three quarters, a 13% fall on the same period in 2024 and 51% below the five-year average. Notably, there were four transactions recorded over £50 million in Q3 2025, including Iroko Zen’s acquisition of One Lyric Square, Hammersmith, for £57 million, reflecting a yield of 8.76% and BauMont Real Estate purchasing Quartermile 1, Edinburgh, for £53.9 million.

Whilst volumes are still low when compared to historical levels, sentiment has been improving towards the sector. This has been partly caused by the ongoing robust performance of the regional office occupational markets. On average, 10% prime rental growth is forecast to be achieved across the Big Six regional cities by the end of 2025. Furthermore, the improvement in take-up levels across core US office markets has positively impacted sentiment towards the office sector on a global basis.

Looking forward, there is £1.7 billion currently under offer or has already exchanged in Q4 2025, which would result in annual investment volumes in 2025 being 20% above the total recorded in 2024. The prime regional office yield has remained stable at 6.75%, with a lack of prime stock being traded across the region. Prime yield compression is expected in 2026, with more investors targeting the regional office market and the discount when compared to other asset types, helping attract capital to the sector. Shopping Centres and Leisure are the only other commercial property sub-sectors that have a higher prime yield than regional offices.

Buyer pool is deepening amidst improving sentiment towards the office sector

Subdued levels of investment turnover have persisted over the last two years. There are, however, signs that a positive shift in sentiment is materialising. This is reflected in the increasing buyer pool targeting the sector. Overseas investors have been the most active across the market; the cohort has accounted for 40% of investment activity in 2025. The buyer pool amongst this purchaser type is getting deeper, which was evident by new entrants deploying capital into the market in Q3 2025. Blue Owl Capital, a US investor, completed its first UK acquisition in Birmingham, acquiring the Mitchell & Butlers headquarters for £55 million. French SCPI investor, Cristal Life, also made its first investment outside the eurozone. The investor purchased Clearblue Innovation Centre, Bedford, for £8.8 million.

The depth of the buyer pool is being further strengthened by the activity from family offices and private investors. Notable acquisitions from these buyers in 2025 included Cornerstone, Crawley, for £35.9 million and 81–85 George Street, Edinburgh, for £20.5 million.

Looking forward, it is expected that family offices and private investors will continue to be active investors across the regional office market. This purchaser type has experienced significant growth, underpinned by increased wealth creation and concentration. Deloitte estimates there will be 10,720 family offices globally by 2030, which represents a 75% growth from 2019. Assets under management from this investor cohort across all sectors are expected to increase by 189% from the current total of $3.1 trillion to $5.4 trillion by 2030. The rise in the wealth of billionaires has also outpaced equity markets over the last ten years, with their global wealth increasing by 121%, compared to 73% growth in the MSCI World Index.

The prevalence of new entrants in the market has aided the fragmentation of active buyers. Only four investors acquired more than three assets in the first three quarters of the year, which represents 4% of named purchasers across the market, demonstrating the disparate nature of the buyer pool.

The robust performance of the occupational markets is being supported by good levels of corporate occupier leasing activity. This trend is evident when reviewing take-up by size band. Notably, in the Greater London & South East region, the number of transactions recorded over 20,000 sq ft in the first three quarters of 2025 was 18% above the five-year average. A similar trend was also evident in the Big Six regional office market, where transactions recorded between 10,000 sq ft and 19,999 sq ft was 21% above the five-year average.

Conversely, there has been a reduction in smaller transactions recorded, primarily caused by a hesitancy in relocation decisions arising from uncertainty surrounding the outcome of the upcoming Autumn Budget. The flight to quality is evident when reviewing the average deal size by grade. Prime transactions across the Big Six regional cities on average totalled 19,000 sq ft, whereas this figure falls to 3,000 sq ft for Grade B buildings for deals recorded in 2025.

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