Downward pressure on prime yields

Regional office investment volumes reached £ 3.6 billion in 2025, which represented a 23% increase on the total recorded in 2024. Investor sentiment has been improving towards the sector, with annual volumes incrementally increasing for the last three years. Turnover is still low compared to historical averages, with the 2025 total being 28% and 48% below the five- and ten-year averages. This trend is reflected when reviewing investment volumes by lot size. There were ten transactions exceeding £50 million in 2025, which was the highest total in the last three years, but still below the ten-year average of 30 deals per annum over this threshold.

The largest transaction in 2025 was Ellison Institute of Technology acquiring the western side of Oxford Science Park for £890 million. This deal represented a landmark inward investment commitment to the city and the largest transaction in the last five years across the regional office investment market. The only other deal over £100 million was McLaren buying their campus in Woking for £250 million.

Prime pricing has remained static for the last eleven months, with the prime regional office yield remaining at 6.75%. There is, however, downward pressure being applied to this yield, highlighting the improved investor sentiment across the market. Regional offices remain attractively priced when compared to other commercial sub-sectors, with only shopping centres and leisure having a higher prime yield. This dynamic, combined with the robust occupational market fundaments, has resulted in Savills placing offices as the most favoured pick for investors in 2026 (Savills UK Cross Sector Outlook 2026).

Diverse and disparate buyer pool persists

A key theme across the regional office investment market over the past two years has been the diverse and disparate nature of the buyer pool. In 2025, only seven buyers acquired more than two assets, which accounted for 3% of named purchasers. While this marked an increase from 2024 — when only three buyers bought more than two assets — this is still low when compared to historic levels. Between 2015 and 2019, an average of 26 buyers per annum acquired more than two assets.

Occupiers were the most active buyer type in 2025, accounting for 35% of investment volumes. However, this proportion was skewed by two large transactions: the Ellison Institute of Technology acquired Oxford Science Park for £890 million, and McLaren purchased its campus in Woking for £250 million. UK property companies and overseas investors were the next two most active investors, accounting for 27% and 26% of investment volumes, respectively.

Institutional investment activity has continued to remain limited, with these purchasers accounting for just 4% of investment volumes in 2025 — the lowest proportion recorded by this cohort in over a decade.

Looking ahead, it is expected that there will be an uptick in investment activity from non-domestic investors, which is being supported by the improving performance of international office occupational markets. Notably, US investors. Demand from this purchaser type has been subdued since the Covid-19 pandemic. However, interest from North American private equity investors has increased in recent months, and we expect this trend to continue.

Constrained supply drives rental growth

The disconnect between occupational and investment market performance has been stark in recent years. Despite the continued low levels of investment turnover, tenant demand in the occupational market has been robust. In 2025, five of the Big Six regional cities recorded annual take-up figures above their five-year averages. Furthermore, the regional office market is characterised by limited availability of best-in-class space, with each of the Big Six regional cities reporting a prime vacancy rate of below 3%.

Supply constraints in best-in-class space are expected to persist, with Manchester being the only market with any new stock actively under construction that is scheduled to complete after 2026. These market fundamentals have combined to result in strong rental growth being achieved, with prime rents across the Big Six regional markets increasing by an average of 8% in 2025. Looking ahead, Savills forecasts average prime rental growth of 5% per annum over the next five years. If an off-plan pre-let was secured, this would further rebase prime rental levels.

Occupier demand is increasingly polarised, with demand focused on core-located assets. Savills 2026 internal sentiment survey across our network of regional office agents revealed that location is the dominant driver of occupier decision-making, with 79% of respondents identifying it as the primary factor in office relocations. The survey also showed that 73% of respondents anticipate rising take-up in prime city centre locations. Current pricing presents an opportunity to acquire high-quality, well-located assets at discounted levels and benefit from this market trend. In some cases, core-plus or value-add returns appear achievable for these assets, which is expected to stimulate investor demand.

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