June sees sixth £100m+ deal of 2025, as H1 turnover reaches double this time last year
June saw £234.6m of transaction volume trading across five deals, reflecting another healthy flow of investment activity and rounding off H1 2025 with £1.80bn transacted across 35 deals, reflecting an average lot size of £51.41m. Compared to the five-year average, the H1 2025 total is down 30% by transaction volume and down 14% in terms of number of deals, but is approximately double the turnover compared to this point last year.
The increase in deal volume has largely been driven by the return of larger lot size deals, with June witnessing the sixth £100m+ deal of the year, already surpassing the four deals of that scale seen during the whole of 2024. Savills is currently tracking a further £1.32bn of stock already under offer across 30 deals and £432.7m of fresh stock being launched to market across 14 deals during June. Momentum looks set to continue through the latter half of 2025.
In the largest deal of the month, Savills advised Daibiru on its acquisition of Capital House, 85 King William Street, EC3, from Barings, for a headline price of £169m. Located in a prime City core location moments from Bank station, the property comprises 121,489 sq ft of office and retail accommodation situated on a freehold island site, with all common areas, end of trip facilities, and seven of the eight office floors having been refurbished since 2021. The property is let to four office tenants and two retail tenants with one vacant office floor, and provides a WAULT of 7.9 years to expiries and 7.0 years to breaks. The property was acquired by Japanese investor Daibiru, which purchased the property as its first London acquisition. The deal highlights further Japanese investor activity, and following the deals seen at 1 Portsoken Street and the 20% share deal at 21 Moorfields, Japanese buyers now account for three of the top six deals in the City market this year, and 27% of annual turnover to date.
In another key deal, 6 Broad Street Place and 15–17 Eldon Street were acquired by Travelodge from the City of London for £25m. Situated in a prime City location immediately opposite the Liverpool Street Elizabeth Line entrance, the opportunity offered a new 155-year long leasehold interest at 5% gearing for two adjoining properties, which comprise 58,893 sq ft and were sold with full vacant possession. Originally quoting £15m and a low capital value of £255 per sq ft, the property attracted significant interest from office and hotel buyers alike but was ultimately acquired on an unconditional basis by Travelodge for £25m, reflecting £424 per sq ft. The sale demonstrated the enduring strength of demand from hotel buyers looking for change of use conversion opportunities, with Travelodge ultimately willing to bid at a competitive level on an unconditional basis in order to overcome strong office interest from value-add buyers looking to capitalise on the City’s premier office location.
In terms of the wider macroeconomic backdrop, June saw the Bank of England’s Monetary Policy Committee maintain the base rate at 4.25%, but having already seen 100 bps of cuts since August 2024, the effects of an improved economy have already begun to emerge. Increasing investor activity – particularly in the larger lot size range – is driving transaction volumes back towards historic average lot size levels, and with more owners beginning to launch fresh stock to the open market, the conditions look set for the latter half of the year to see further recovery.
Savills City prime yield is 5.25%, while the West End prime yield is 3.75%.