West End Investment Market
The West End recorded £995M of transactions during Q2 2025 either exchanged or exchanged and completed in 23 transactions with an average transaction size of £43M.
Three of the deals for the quarter exceeded £100M, two of which were acquisitions by Delancey/Aware Super for 15-20 Manchester Square for £118M, 5.20% NIY and 11-12 Hanover Square for £170M, 3.86% NIY. The third was a corporate acquisition of the Argyll serviced office platform by Crosstree Real Estate. The reported price in the press of £330M was for a business which encompassed 25 Business Centres including around 10 which were owned outright – split broadly 55% West End and 45% City.
It brings the year total to date to £2.645Bn, 44 transactions – ahead of this point last year and 25% ahead of the half year 5-year average of £2.057Bn.
Q2 continued to see an increasing depth of buyers for some assets, driving competitive tension and leading to assets selling significantly above the guide in certain instances – an example of this is the sale of Screen House, 119-123 Wardour Street, W1 by Lothian Pension Fund – a prime Freehold office refurbishment opportunity with immediate vacant possession. The property had over 80 inspections and around 15 bids with buyers drawn in by the prospect of a high-quality refurbishment and the ability to capitalise on a strong office rental market. The property was purchased by DWI, their first London acquisition, for £29.12M reflecting £1,142 per sq ft - c. 16% ahead of the guide price.
Unlike Q1, where only one leasehold traded, we have seen a resurgence in Leasehold assets sold, accounting for 25% of this quarter's transactions.
Who is Active?
Over the course of this year, the depth of buyers for well-located offices has increased markedly, and the sector is back on the shopping list for funds, propcos and privates alike, attracted by strong returns being driven by rental growth. Indeed, most noticeable has been the greater depth for the larger lot sizes.
REITS and funds had a large part to play in terms of purchases this quarter with Australian pension fund Aware Super dominating the transaction volumes to the tune of close to £300M. We have seen buying activity from Aberdeen, Shaftesbury Capital, Ares and Aermont. While the smaller lot sizes have continued to be attractive to Private’s and UHNW investors. We have seen a number of new entrants to the market this quarter with purchases by DWI, Victory Group and 3RE.
Headline Deals
20 Manchester Square, W1 and 11-12 Hanover Square, W1 were both purchased in excess of £100M and underwent competitive bidding processes. Patrizia have now concluded the sale of 11 Baker Street, W1 to Aermont / 3RE. The deal was for the Long Leasehold interest from the Portman Estate and comprised a redevelopment opportunity with it benefitting from vacant possession in October 2026 – Purchased for £56.5M reflecting 6.93% NIY and a £806 per sq ft.
Orchard Street sold 27-35 Mortimer Street, W1 in Fitzrovia to Aberdeen for £48.25M for their Borders to Coast fund. Royal London have sold their Freehold interest in 149-151 Oxford Street, W1 to a Private Owner Occupier for £63M reflecting £1,921 per sq ft. The building comprises a mixed-use office and retail building of 32,795 sq ft. Aberdeen sold 24-28 Bloomsbury Way, WC1 to Danish investor Habro for £41.25M reflecting 4.56% NIY and £924 per sq ft – another very competitive process – the property provided 5 year income off a very low rent and with future repositioning angles.
Allsop West End team advised Shaftesbury Capital on their off-market purchase of 16-18 Beak Street, Soho, W1 for between £19-20M.
Direction of Travel
Looking forward to the second half of the year, we expect to see the continuation of a wait-and-see attitude from some investors, with a large amount of stock overhanging the market. As buyers can be highly selective, economic turbulence is likely to emphasise this.
However, there are continued positive signs that the market will continue to improve, supported by another expected rate cut and a strong occupational market. Demand for core West End assets is expected to remain strong.
We are tracking close to £1.3Bn of assets under offer, including 1 Newman Street, W1 - under offer to Royal London for a reported c.£260M, around 4.3%-4.4% NIY – this had been quietly tested c 18 months ago by GPE who elected to hold at the time when offers were apparently received around 75bps short of where it is now under offer at. 101 New Cavendish Street, W1 is also under offer to Ares for around £100M.
Depth of buyers for “the right stock” is only increasing – as evidenced by 24-28 Bloomsbury Way, WC1 which had multiple rounds of bids taking pricing from £35.5M, 5.3% NIY, to £41.25M, 4.56% NIY and 11-12 Hanover Square, W1 which went well in excess of the guide price of £160M, 4.10% NIY.
Since April, we have seen around 40 assets formally launched for sale, equating to £1.9Bn+ of value in the West End. We are always keen to catch up to run through market opportunities.
