June sees sixth £100m+ deal of 2025, as H1 turnover reaches double this time last year
July saw £197.6m of transaction volume trading across six deals, bringing the year-to-date (YTD) turnover to £2.00bn across 42 deals. The month witnessed a healthy flow of smaller deals as well as another £100m+ transaction, which marks the seventh deal in this lot size range this year, compared to only four deals of that scale throughout the whole of 2024. The relative resurgence of bigger deals has been a key driver in the increased volumes, and while the number of deals remains lower than at this point last year, the average lot size range has increased to £47.6m compared with a mere £23.6m at this point 12 months ago. The YTD turnover, when compared to the five-year average, remains 33% down by transaction volume and 11% down by number of deals. At the end of July, the quantum of deals under offer stood at £2.05bn.
In the largest deal of the month, Delancey acquired Finsbury Circus House, 15 Finsbury Circus, EC2, purchasing the freehold interest from German fund, Union Investment, for a sum of £143m, reflecting a net initial yield of 5.50% and a capital value of £1,004 per sq ft. Prominently situated on the north side of Finsbury Circus in a prime City location, the property is located within 200 metres of Moorgate station and the Elizabeth line entrance to Liverpool Street. The property was comprehensively refurbished by Union in 2012 and comprises 142,457 sq ft of office accommodation, which is fully let to five office tenants at a rent of approximately £8.4m per annum, reflecting a reversionary overall rent of £58.96 per sq ft and a WAULT of 5.6 years to earliest determinations.
In another significant deal on the Southbank, the Royal College of Anaesthetists acquired Goat Yard, 20 Queen Elizabeth Street, SE1, buying the freehold interest from RE Capital for £21.5 million, reflecting a 7.64% net initial yield and £723 per sq ft. Located in the Shad Thames area, approximately 0.5 miles east of London Bridge station, Goat Yard was comprehensively refurbished and extended by RE Capital in 2023 to provide 29,748 sq ft of new Grade A office accommodation, featuring a communal rooftop terrace.
The property is multi-let to three tenants, with two vacant floors, providing a topped-up passing rent of £1,754,543 per annum, reflecting £58.98 per sq ft overall. The Royal College of Anaesthetists intends to occupy the vacant space for itself in the first instance, with the option to expand into the building upon lease expiries of the other tenants. At a time when rental values are at record levels and capital values are at a relative discount, the transaction further highlights the current trend of occupiers seeking to purchase rather than lease their property.
The quantity and quality of fresh stock that will arrive in September will also be a key factor in determining the course of the market for the remaining year
Ed Robinson, City Office Analyst, Commercial Research
In another key deal in the sub-£20m Core Plus space, Mazabi Gestión acquired the freehold interest at 1 Sekforde Street, EC1, from Hermes at a price of £16m, reflecting 7.91% net initial yield and £657 per sq ft. The property is approximately an eight-minute walk north of Farringdon station and consists of a freehold office building comprising 24,343 sq. ft. The property is single-let to Catapult Connected Places until December 2033 with a break option in December 2028, at a passing rent of £1.35m per annum, reflecting £63.67 per sq ft. The property has been on the market since 2022 and eventually found its buyer in the form of Spanish investor, Mazabi Gestión, whose purchase of the building marks its third transaction of the year, following earlier acquisitions of the long leasehold interest in 41–42 Trinity Square, EC3, and the freehold interest in 67–69 Turnmill Street, EC1.
Due to typical summer holiday disruption, July saw unsurprisingly little new stock, with just £39m across four properties being launched to the open market, and August is expected to be similarly quiet. However, despite £1.90bn of stock already currently available, the quantity and quality of fresh stock that will arrive in September will also be a key factor in determining the course of the market for the remaining year.
Savills City prime yield is 5.25%, while the West End prime yield is 3.75%.