Savills has called the UK commercial real estate investment market for 2025, saying that it is confident that combined volumes for the office and industrial sectors this year will exceed 2024’s total by the year end.
As of the end of September 2025, approximately £7 billion and £6.2 billion had transacted in the industrial and office sectors respectively, against the 2024 full year volumes of approximately £10.8 billion and £9.9 billion, but Savills says, given the volume of assets currently under offer or at an advanced legal stage, it anticipates that Q4 will see these numbers surpassed.
The international real estate advisor points to more signs of positivity in its latest Market in Minutes report, including the prime average yield remaining unchanged in September, at 5.75%, for its seventh month since February, yields in 10 CRE sub-sectors remaining stable for over a year, and four sub-sectors (offices in the City of London; leisure parks; food stores and London core leased hotels) all seeing downwards pressure on yields.
Tom Whittington, Director, Savills Research, comments: “While the day-to-day headlines and speculation over the Budget may be casting a pall over the market, it’s easy to lose sight of several economic indicators that actually show us as being in a lot better place than we were 12 months ago. The Bank of England base rate is down 100 basis points, construction GVA has moved from negative to positive territory, exports have seen stronger than expected growth, and the British Chamber of Commerce has revised up its previous GDP forecast to 1.3%. The situation isn’t as gloomy as may be assumed at face value, and against this backdrop we are seeing a notable uptick in investment activity.”
Nick Penny, Joint Head of National Investment at Savills, adds: “While it would be an understatement to describe the UK investment market this year as slow, the wider economic environment has settled and we are definitely seeing momentum return. In offices, investor sentiment is catching up with the occupier market, and we have seen more larger deals transact since Q2, which look set to contribute to London and regional offices having the highest turnover of all the UK sectors in 2025. In industrial and logistics, with a number of large industrial portfolios currently being marketed or under offer, and Q4 traditionally the busiest quarter, we anticipate that full-year industrial volumes will be up on 2024. Looking ahead to 2026, we hope that activity will continue to accelerate so by this time next year we will be talking about volumes being not only up year-on-year, but also on the five-year averages.”