October sees highest monthly turnover since March 2023
October saw £472.8 million of turnover trading across eight deals, marking the highest monthly transaction volume recorded in the City since March 2023. The turnover figure is primarily a result of two larger lot size deals in excess of £150 million transacting, which have boosted the year-to-date (YTD) turnover volume to £2.88 billion across 66 deals, reflecting an average lot size of £43.6 million. While 2025 volumes are still 33% down compared to the five-year average, they are 57% higher than at this point last year, demonstrating clear signs of market recovery, most notably in the larger lot size range, where October’s two biggest deals took this year’s tally of £100 million+ deals up to nine, compared to just four during the whole of 2024. Savills is currently tracking £2.51 billion under offer across 47 deals, including six deals in excess of £100 million, and a further £2.95 billion of available stock across 73 deals.
In one of the largest deals this year, Savills and CBRE advised HB Reavis on the disposal of the freehold interest in Worship Square, 65 Clifton Street, EC2, to Hines. Situated approximately five minutes’ walk to the north side of Liverpool Street station, Worship Square is a ground-up development completed in 2024 by HB Reavis with architectural design by Make Architects. The building comprises 143,401 sq ft of office and retail accommodation arranged over two lower ground floors, ground, and eight upper floors, and benefits from exceptional ESG credentials, including an EPC A and a BREEAM Outstanding rating. The property is multi-let to three tenants at a passing rent of £10,905,334 per annum, reflecting £78.10 per sq ft overall, and providing a WAULT of c.12.5 years to expiries and 7.7 years to breaks.
In the largest transaction since April, DWS sold its long leasehold interest (133 years unexpired term at 3.75% gearing) in Park House, 16 Finsbury Circus, EC2, to Feldberg / ENKA for £185.5 million. Located on the north side of Finsbury Circus, within two minutes’ walking distance of the Elizabeth Line entrance to Liverpool Street station, Park House is a 2008 development behind a Grade II Listed façade, comprising 181,000 sq ft of office and retail accommodation arranged over lower ground, ground, and seven upper floors. The property is multi-let to five office tenants and one retail tenant at a net rent of £10.59 million per annum, reflecting a reversionary £58.41 per sq ft overall, and provides a WAULT of 5.7 years to expiries and 4.8 years to breaks. The property was acquired by Feldberg Capital and Turkish investor, ENKA, for £185.5 million, reflecting a 5.61% net initial yield and £1,024 per sq ft. The deal follows Delancey’s acquisition of the neighbouring building at Finsbury Circus House in June this year, and emphasises investor appetite for investment opportunities in prime locations close to Liverpool Street station.
In another significant deal which re-emphasises the continuing demand for hotel conversion opportunities, Staycity and development manager Citygrove acquired the freehold interest in 202–208 Blackfriars Road, SE1. Located in close proximity to Southwark station, the property consists of an island site comprising two office buildings which total 22,769 sq ft. The site benefits from detailed architectural studies for a 21-storey development and a March 2027 block date. Following recent changes to the City of London’s planning policy, hotel developers have been increasingly active in the City over the last few years, but now appetite appears to be expanding to neighbouring boroughs such as Southwark, where notable developers such as Whitbread and Hub have recently acquired office-to-hotel development sites. The property was sold for £28 million, reflecting £1,230 per sq ft.
With October’s deals providing a strong start to Q4, and a further £2.51 billion currently under offer, there is reason to expect the year to finish positively. However, despite significant market recovery from last year’s record low annual turnover, and potential further interest rate cuts reducing the base rate, the macroeconomic recovery still continues to improve more slowly than initially hoped, and with higher inflation and the UK’s annual budget set for 26 November, a sense of caution is likely to accompany short-term investment activity.
Savills City prime yield is 5.25%, while the West End prime yield is 3.75%.