July sees low deal volume for the month
July saw four deals exchange, amounting to a low £50.5 million of turnover. Following June’s eye-catching headline of Barclays’ £750 million acquisition of 1 Churchill Place, and more than £900 million of turnover overall, this month’s subdued activity re-emphasises both the lack of momentum in the current market as well as that major deals such as 1 Churchill Place are very much anomalies rather than the norm. The year-to-date turnover at the end of July stands at £1.92 billion across 46 deals, reflecting an average lot size of £41.7 million, which, when compared to the five-year average, reflects a 35% decrease by volume and a 4% decrease by number of deals.
Meanwhile, July also saw geopolitical volatility continue internationally, as the US-Iran ceasefire appears fragile, and domestically, as former British Prime Minister Keir Starmer officially resigned to be replaced by Andy Burnham. Unsurprisingly, at the Monetary Policy Committee on July 30, the Bank of England (BoE) voted to maintain the base rate at 3.75%; however, interestingly, three of the nine members of the Committee voted in favour of increasing the base rate.
In the largest deal of the month, Savills acquired the freehold interest in 6–8 Tokenhouse Yard, EC2, acting on behalf of Aberdeen, who purchased the asset from Schroders for £19.5 million. Located in a prime City core location, moments to the north of the BoE and within five minutes’ walking distance of Bank and Moorgate station, the property comprises a vacant possession office building comprising 29,535 sq ft arranged across two lower ground, ground and six upper floors. The property provides an opportunity to refurbish and reposition the asset in order to capture the strong rental growth which is currently being seen in the City core occupational market. Having already purchased The Sans in Q1 (also for its Border to Coast fund), this deal marks Aberdeen’s second City acquisition so far this year, demonstrating a growing trend of UK institutional funds returning to the market.
In another significant deal, the freehold interest in Baird House, 15–17 St Cross Street, EC1, was sold for £16 million. Located in the Farringdon submarket, approximately four minutes to the north-west of Farringdon station, the property consists of an all-electric, EPC B freehold asset comprising 23,997 sq ft of office and ancillary accommodation across basement, ground and four upper floors. The property is multi-let to 10 tenants with one vacant floor at a topped-up passing rent of £1,238,439 per annum, reflecting a reversionary £51.61 per sq ft overall and providing a WAULT of 3.7 years to expiries and 2.9 years to breaks on the let accommodation. Launched to the market in January 2026 quoting £17.3 million, reflecting 6.71% net initial yield and £721 per sq ft, Baird House was sold by St Anselm’s to a Private European investor for £16 million, reflecting a 7.25% net initial yield and £667 per sq ft. The transaction further emphasises the apparent demand for sub-£20 million Core Plus assets, particularly among small European funds and private investors, provided that properties are priced with sufficiently attractive net initial yields.
In another deal, Savills acted on behalf of Canal & River Trust, disposing of the freehold interest in 37 Lombard Street, EC3. Located on the south side of the historic Lombard Street in the City core, within five minutes of Bank, Monument and Cannon Street stations, the property comprises a newly refurbished, all-electric, EPC B office building comprising 9,502 sq ft arranged across two lower ground, ground, and five upper floors. The property is single-let to a serviced office tenant, Hubflow, at a passing rent of £480,000 per annum, reflecting £50.52 per sq ft overall, on a new 10-year lease with no breaks, expiring on 17 September 2035, providing a WAULT of 9.2 years term certain. The property was sold for a gross purchase price of £6.65 million, reflecting a 6.76% net initial yield and £700 per sq ft.
As at the end of July, Savills is tracking £1.49 billion of under-offer stock across 26 deals, with an estimated £4.75 billion of available stock across 70 properties.
The West End prime yield remains at 3.75%, while the City prime yield stands at 5.25%.