Quiet April as geopolitical tensions pause City investment activity
The City market saw only one transaction during April, a rare occurrence which highlighted the current ambivalence among investors against a backdrop of geopolitical volatility and macroeconomic uncertainty. At the end of April, YTD turnover volume remained at £744 million across 24 deals, reflecting a 60% decrease in turnover compared with the five-year average, as well as a 13% fall in the number of deals. Despite the lack of deals in April, there were seven deals that went under offer during the month, with an estimated value of £285 million, bringing the under-offer total to £1.28 billion across 30 deals.
Despite the lack of completions, Savills tracked three new £50 million-plus assets going under offer during April, demonstrating that investor appetite for initiating new deals remains. The substantial volume of under-offer deals, which now stands at £1.28 billion, appears to be indicative of a market which is seeing increasingly long time periods between going under offer and exchanging. Research indicates that during 2025, the average duration from under offer to exchange exceeded three months, and that approximately 10% of the deals took longer than six months to reach exchange from going under offer. Whether delays are caused by heightened scrutiny during the due diligence phase or a lack of buyer conviction in a challenging macroeconomic environment, the result is that deals are taking notably longer, meaning that estimated timescales could affect both vendors and buyers looking to execute transactions this year.
Other trends continuing in the current market include the growing number of owner-occupiers purchasing assets. During 2025, owner-occupiers accounted for 15% of all transactions, ranging from sub-£5 million deals through to State Street Bank’s £330 million (net) purchase of 100 New Bridge Street. However, as at the end of April 2026, the proportion of owner-occupier purchases has risen to 25%. This trend re-emphasises the strength of demand for office space among occupiers, while simultaneously contrasting the caution among traditional investors, as seen with recent open market processes such as 45 Cannon Street, where investors were typically bidding at least 25–50 bps lower than the eventual owner-occupier purchaser.
Following the City of London’s 2024 policy change offering stronger support for change of use on redundant office buildings, alternative-use investors have been particularly active in the market
Ed Robinson, City Office Analyst, Commercial Research
By contrast, the number of transactions by alternative-use purchasers (typically looking for change of use to hotels or serviced apartments) appears to have decreased. Following the City of London’s 2024 policy change offering stronger support for change of use on redundant office buildings, alternative-use investors have been particularly active in the market, accounting for 22% of all transactions in 2025. However, so far this year, only one transaction (4%) has traded to an alternative-use buyer, potentially as a result of the City retightening its policy, having already granted numerous consents for change of use, and with a robust leasing market challenging the claim of obsolescence.
In terms of office investors, the geographical spread of purchasers is becoming increasingly varied. In terms of European investors, notable activity from French and Spanish buyers in 2025 has continued into this year, while two German investors have also returned to the City market to make purchases following a relative absence in recent years. Similarly, American capital also appears to be re-emerging, particularly in the larger lot size range, as seen in the transactions of 1 Wood Street (Meadow Partners) and Fetter Yard (Ares), which follow Hayfin’s acquisition of 70 St Mary Axe in Q4 2025. UK funds such as Aberdeen have also increased their investment activity with the purchase of The Sans, following the likes of M&G and L&G, both of which acquired City assets during 2025. Israeli capital has also been active, with three purchases so far this year.
With a variety of capital sources seemingly engaged in London, the conspicuous absence of transactions during April is arguably more indicative of wider macroeconomic volatility than a reflection of sentiment towards City offices specifically, particularly considering that the market has suffered from a chronic lack of stock for the last 18 months or longer. With current geopolitical and economic uncertainty prevailing, investment will remain challenging, and periods of inertia may follow. How quickly the landscape may change will inevitably have a significant bearing on whether or not this month’s inactivity proves to be an anomaly.
West End prime yield remains at 3.75%, while City prime yield stands at 5.25%.