January sees a quiet start to 2026 following December’s flourish
Following a strong finish to 2025, which saw the highest monthly turnover since March 2022, the new year began with a typically quiet January, with only £115.4 million trade across three deals. Historically, January has been the quietest month of the year, typically as a result of buyers and sellers pushing to close deals before the end of December, combined with new stock requiring time to be marketed.
Although December saw 20 deals complete, Savills was still tracking a further £2.04 billion of under-offer stock across 42 deals at the start of the year, including four deals in excess of £100 million. Despite this, only three deals traded during January, indicating a slow start to the year and illustrating the continuing trend of under-offer deals taking a long time to complete. At the end of January, Savills is tracking £2.01 billion under offer across 41 deals.
In the largest deal of the month, Savills advised Hong Kong investor Junhao on the disposal of Bavaria House, 13–14 Appold Street, EC2, selling the freehold interest to a confidential purchaser. Located approximately 150 metres to the north of Liverpool Street, the property offers a 0.28-acre site with full planning consent for a mixed-use office and hotel tower scheme designed by Kohn Pederson Fox, totalling 229,616 sq ft arranged over four basement levels, ground floor and 45 upper floors.
In another significant deal, Aberdeen acquired Nuveen’s freehold interest in The Sans, 20 St John’s Square, EC1, purchasing the asset for its Border to Coast fund for £45.9 million, reflecting a 5.85% net initial yield and £1,250 per sq ft. Located approximately 300 metres to the north-east of Farringdon station, the property is held freehold and comprises 36,724 sq ft across lower ground, ground and four upper floors. The building was comprehensively refurbished in 2023 to a high specification with strong ESG credentials, including BREEAM ‘Excellent’ and a rare EPC A rating. The property is multi-let to four office tenants at a passing rent of £2,862,550 per annum, reflecting £77.95 per sq ft overall, with 6.4 years to expiries and 4.5 years to breaks. Aberdeen’s acquisition of The Sans follows two West End purchases in 2025 and highlights the re-emergence of UK institutional funds in the City buyer market, with traditional investors such as M&G and L&G also acquiring new stock last year.
In another deal, the City of London sold a new long leasehold interest (155 years at 5% gearing) in Finsbury House, 23 Finsbury Circus, EC2. Prominently located on the eastern side of Finsbury Circus in a prime location within 50 metres of the Liverpool Street Elizabeth Line entrance, the property comprises a late 19th-century corner building totalling 39,607 sq ft GIA arranged over lower ground, ground, mezzanine and five upper floors. The property was sold with full vacant possession and the benefit of a fully consented office scheme proposing 24,671 sq ft NIA of best-in-class offices and a new rooftop terrace. The long leasehold interest was acquired by Israeli investor Eatos Group for £9.5 million, reflecting £385 per sq ft based on the proposed NIA. The deal reflects an ongoing trend of the City of London Corporation selling off existing interests to raise capital to fund larger projects across its portfolio.
Despite a characteristically quiet January, with £2.01 billion still under offer and £4.03 billion of available stock across 66 deals, prospects remain positive for 2026. With five £100 million-plus deals poised to transact, the completion of larger deals will be key. Meanwhile, the market awaits new available stock that should further stimulate investor interest in a market witnessing increasing investment activity to support the robust fundamentals of an occupational market experiencing rental growth.
The West End prime yield is 3.75%, and the City prime yield is 5.25%.