European office deals bounced back last year, as investors ploughed money into transactions after the prospect of a supply crunch revitalised the sector.
A total of 21 transactions worth £100m or more were completed in central London as of mid-December, up from the 12 completed during 2024, first reported in the Financial Times.
Meanwhile, nine office buildings were sold for £200m or more, compared with just one in 2024, with office building sales in central London worth £100m or more amounted to 53 per cent of total sales volume as of-mid December, up from 27 per cent last year, according to real estate agent Savills.
Oliver Bamber, director for central London investment at Savills, noted “investors are feeling more confident” about putting money back into the sector, particularly domestic funds and institutions.
Investors drawn to Europe
Nick Deacon, head of office for Europe at Nuveen Real Estate, said: “Despite the noise around work from home… demand has stayed up, supply is looking really difficult, we’re all anticipating rental growth and that’s fundamentally what people are buying into.”
However, investors are remaining selective, with bidders keeping their focus on well-located buildings in top global cities, particularly in Europe, with London, Amsterdam and Berlin among the cities attracting significant investor attention.
Lars Huber, head of Europe at Hines, said: “Investors are drawn to Europe right now because the interest rate environment has improved, construction costs are moderating, there’s less of top-quality office space and Europe provides geopolitical stability compared to other places.”
Huber also noted that traditional lenders are becoming increasingly keen to lend, which is adding liquidity.
In the first six months of 2025, new commercial real estate lending in the UK totalled £22.3bn, up from 33 per cent the prior year, according to research from Bayes Business School
