The general consensus amongst the top property advisors is there will be contracting pressure on yields for prime assets over the next 12 months which will come from finite stock for sale, capital growth driven by positive rental growth and likelihood that UK interest rates drop further. Currently prime Mayfair is standing at 3.75% net yield and prime City yields remain stable around 5.25% – 5.5%. The yield discrepancy between core and non-core assets remains at a historic high with fringe assets and grade B level offices being sold at significantly higher yields.
There are now many UK institutions and REITs that are in active buying mode, driven by the London office rental growth forecasts and London yields looking attractive value against Paris and Munich and some other markets. There are also a number of Private Equity investors buying value add or core plus buildings.
Below is a good cross section of transactions which have occurred in the Q4 2025 / Q1 2026 comprising, Core office buildings, value add development opportunities and some Core plus offices ( even some hotel transactions).
Key deals end 2025 / early 26
The key deal of the quarter for the West End market is the sale by GPE Reit of a brand new, grade A office and retail block cornering Oxford Street which is called 1 Newman Street in Noho W1 at £250m and 4.78% net yield and sold to a UK Fund. Whilst in the City market, 70 St Mary Axe (the Can of Ham) was sold to Hayfin Capital and Capreon for £330m which was 5.5% net yield. This is arguably the most important building sold for the last 2 years.
Investment Commentary Quarter 1 2026
20/03/26 | Written by Gregor Wallace
The general consensus amongst the top property advisors is there will be contracting pressure on yields for prime assets over the next 12 months which will come from finite stock for sale, capital growth driven by positive rental growth and likelihood that UK interest rates drop further. Currently prime Mayfair is standing at 3.75% net yield and prime City yields remain stable around 5.25% – 5.5%. The yield discrepancy between core and non-core assets remains at a historic high with fringe assets and grade B level offices being sold at significantly higher yields.
There are now many UK institutions and REITs that are in active buying mode, driven by the London office rental growth forecasts and London yields looking attractive value against Paris and Munich and some other markets. There are also a number of Private Equity investors buying value add or core plus buildings.
Below is a good cross section of transactions which have occurred in the Q4 2025 / Q1 2026 comprising, Core office buildings, value add development opportunities and some Core plus offices ( even some hotel transactions).
Key deals end 2025 / early 26
The key deal of the quarter for the West End market is the sale by GPE Reit of a brand new, grade A office and retail block cornering Oxford Street which is called 1 Newman Street in Noho W1 at £250m and 4.78% net yield and sold to a UK Fund. Whilst in the City market, 70 St Mary Axe (the Can of Ham) was sold to Hayfin Capital and Capreon for £330m which was 5.5% net yield. This is arguably the most important building sold for the last 2 years.