This month’s UK real estate update highlights sustained confidence in the market, with significant activity from domestic and international investors. London’s office market continues to lead, with strong leasing performance, record-breaking rents, and a growing appetite for flexible, sustainable spaces.
Our BRE team has been searching the headlines for the most fascinating and notable stories and trends over the past few weeks. Read on to see our pick of the most interesting themes impacting the UK real estate sector.
Key deals over recent months underscore the sustained confidence in London’s prime real estate market, with notable activity across core submarkets. AEW’s acquisition of 95 New Cavendish Street and GPE’s £58.1 million purchase of Whittington House highlight the demand for value-add opportunities, while Greycoat’s £180 million High Holborn acquisition and KKR’s £900 million purchase of 33 Marriott hotels reflect robust investor interest in central assets and the recovering hospitality sector.
In St James’s, JPMorgan’s £135.45 million sale to Ares Management and Realty Income’s ongoing discussions to acquire a £125 million office signal continued demand for prime locations, complemented by Oval and Elliott’s £80.7 million Mayfair acquisition, reinforcing the strength of central London’s office market.
Recent structural and regulatory changes in the market, along with significant repricing, have highlighted a strong appetite for Grade A assets in Central London. This is exemplified by Greykite’s £750 million investment in single-family rentals and Delancey’s £1 billion joint venture with Aware Super. Meanwhile, Derwent London’s leasing success and rent guidance upgrade signal a robust outlook for prime office assets.
GPE reviews £1bn of acquisition opportunities
Great Portland Estates (GPE) is reviewing over £1 billion in acquisition opportunities, including £125 million in active negotiations and £900 million on its watchlist. Recent purchases include 22 Store Street, 19/23 Wells Street, and Whittington House. (CoStar)
Aware Super and Delancey launch £1bn joint venture
Australian fund Aware Super has partnered with Delancey to launch a £1 billion UK real estate venture, demonstrating robust foreign capital flows into the market and supporting sector resilience. (IFA Magazine)
KKR buys 33 UK hotels for £900m
KKR and Boston-based Baupost have acquired a Marriott-branded UK hotel portfolio from ADIA for £900 million, betting on a strong recovery in the travel and tourism sectors. (Hotel Investment Today)
Greykite and Gatehouse commit £750m to UK rentals
Greykite, in partnership with Gatehouse, has announced a £750 million investment in single-family rental homes, responding to rising rental demand driven by affordability challenges. (Bloomberg)
Greycoat closes £180m High Holborn deal
Greycoat has acquired 90 High Holborn for £180 million, marking one of the year’s largest office transactions and underlining investor confidence in central London locations. (CoStar)
JPMorgan achieves above-asking £135m St James’s sale
JPMorgan has sold a St James’s office asset for £135.45 million to Ares Management. The deal reflects a 4.33 net initial yield and £2,668 per square foot and highlights the US private equity firm’s continued deployment into Central London assets. (CoStar)
US investor targets £125m St James’s Square office
US investor Realty Income is in discussions to acquire a prestigious St James’s office for £125 million, signalling continued demand for prime London submarkets. (CoStar)
Legal & General secures Soho office deal
Legal & General has acquired a multi-tenant office block in Soho emphasising demand for core-location assets with diverse tenant profiles and resilient occupancy. Although the price of the deal has not been disclosed, reposts suggest the office traded below the £76.5m asking price. (CoStar)
Oval and Elliott continue Mayfair acquisitions
Oval and Elliott have acquired 6-7 Clifford Street in Mayfair for £80.7 million, reflecting robust demand for prime central London office assets. (CoStar)
Helical exits JJ Mack Building for £71m
Helical has sold its 50% stake in the JJ Mack Building to JV partner Ashby Capital for £71 million, aligning with its strategy to fund future development projects. (CoStar)
AEW acquires West End redevelopment
AEW has acquired 95 New Cavendish Street in Fitzrovia, London, as part of a recently created European real estate mandate for a German pension fund. The property, slated for redevelopment in 2025, reflects renewed demand in London’s core as investors target prime value-add opportunities. (IPE Real Assets)
AXA IM sets record City rent at 22 Bishopsgate
AXA IM has secured a record lease at 22 Bishopsgate, with Banco Master taking the 56th floor at £122/ft², underscoring the resilience of prime office demand in the City of London. (CoStar)
Derwent expands portfolio amid rental growth
Derwent London has bolstered its portfolio with acquisitions supported by strong leasing and rental growth, leveraging core London market fundamentals to drive strategic investments. (CoStar)
GPE secures £150m ESG loan and new acquisition
GPE has obtained a £150 million ESG-linked loan for West End refurbishment projects. Separately, it acquired Whittington House, a 74,500 sq ft office property, for £58.1 million, highlighting a dual focus on sustainability and prime asset growth. (CoStar)
French fund Remake expands in Spitalfields
French fund Remake has increased its investment in Spitalfields via a £33.3m deal for 100 Middlesex Street. The acquisition reflects growing international interest in targeting high-potential development areas in East London. (CoStar)
GPE grows flex office portfolio in West End
GPE has acquired 19/23 Wells Street in London’s West End for £19m from British Land. The deal expands its flexible workspace portfolio, meeting the rising demand for adaptable leases in the post-pandemic era. (CoStar)
UK office occupancy hits post-summer high
UK office occupancy rates have reached their highest levels since July, indicating recovery as hybrid work adapts to include greater physical office presence. (CoStar)
UK rent collection returns to pre-pandemic levels
Commercial property rent collection in the UK has recovered to pre-pandemic levels, providing investors with consistent income stability across asset classes. (CoStar)
For further information about any of the insights shared above or to find out more about Bedrock’s Real Estate services, please do reach out: info@bedrockgroup.ch
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This month's news round-up looks at a positive few weeks for UK real estate, with strong activity across the office, retail and logistics sectors, while continued rental rises offer more encouragement for investors.
In July's news round-up, we're focusing on the positive activity in the central London office market as a surge in demand for leasings and strong interest from investors help give the sector a boost.
In June's news round-up, we look at some of the major trends and transactions that are helping demonstrate growing positivity for the London office market and why this is creating new opportunities for investors.