City Investment
The total volume for Q3 2026 reflected £1.218Bn across 21 transactions bringing the annual running total to £3.085Bn. As in Q2, the total volume is skewed by a single large transaction, in this case Brookfield’s acquisition of 1 Bank Street, E14 for £625M from the Qatar Investment Authority. The deal reflects 51% of transaction volume for Q3, without it, the volume sits at just £592M.
The running total for 2026 is 25% ahead at this point last year but without the notable transactions of 1 Bank Street (£625M) & One Churchill Place (£725M-Q2) volumes would sit at just £1.711Bn, a stark reflection of continued global economic uncertainty with five-year swap rates climbing to 4.70% at the time of writing.
Allsop’s view on Prime City yields has softened slightly to 5.50%, while non-core assets continue to bear the brunt of repricing, with yields at historically elevated levels. Any evidence of yields at a premium to this is likely to factor in rental reversions as prime rents continue to trend upwards especially in the core City locations near Moorgate, Bank and Liverpool Street.
There remains a lack of readily available stock on the open market with most landlords only selling where there is an underlying pressure to do so. Despite this, Allsop are tracking many significant deals under offer as we enter a historically buoyant Q4.
Investor appetite remains for well-located, best-in-class office buildings with strong ESG and sustainability credentials. More opportunistic, value-add capital is also increasingly prevalent, attracted by a buoyant occupational market and the prospect of repositioning existing stock to meet occupier demand. This has been reinforced by several years of constrained development activity, with historically high construction costs limiting new supply.
1 Bank Street
Who is Buying
UK Investors continue to dominate transactions by number accounting for 48% of deals this quarter following 74% of transactions in Q2 2026. European and Middle Eastern Investors come in joint second at 20%, each with North American and Asian investors accounting for the remainder.
French SCPI's (Société Civile de Placement Immobilier) fund Iroko Zen made their seventh London purchase in Q3, acquiring 179-191 Borough High Street, SE1 for £27M reflecting a net initial yield of 8.98%. The property is single let to Kaplan expiring 2033 and reflects the typical stock fuelling French SCPIs spending spree, notably secure income in excess of 7.5% NIY.
European Investors still consider the UK as a safe haven for investment particularly in the £5M - £25M lot size range. Allsop advised the vendor St Anselm on the sale of Baird House, EC1 to a Private Greek Investor. The Freehold office sold for c.£16M / £665 psf / 7.45% NIY. Allsop also advised Spanish Family Office Mazabi on the off-market acquisition of 65 Fenchurch Street, EC3 for £8.735M / £778 per sq ft / 7.02% NIY.
Owner Occupiers made up 2 of the 21 transactions in Q3, remaining active, seeking to capitalise on historically low capital values and elevated rental costs.
179-191 Borough High Street, SE1
65 Fenchurch Street, EC3
Worship Street Estate, EC2
21 Garlick Hill, EC4
6-8 Tokenhouse Yard, EC2
Who is Selling?
The City of London Corporation continue to re-balance its Real Estate holdings with two sales in Q3. The strategy triggered the sale of the Worship Street Estate, EC2 to Frasers Group / Roca for £75.15M. The estate is made up of 10 freeholds and one long leasehold property and is located immediately north of Finsbury Square. The price reflects £386 per sq ft and 8.39% NIY and the estate offers the exciting opportunity for a multitude of business plans ranging from stabilisation of the buildings to selling off individual assets. The second sale was 21 Garlick Hill, EC4 which sold for £8.35M / £375 per sq ft to SG Rocks.
UK Institutions continue to reduce their office exposure through the disposal of liquid assets. Schroders disposed of 6-8 Tokenhouse Yard, EC2 a Prime Core redevelopment opportunity. This was purchased by Aberdeen to satisfy a valued-add requirement, reflecting £660 per sq ft. The building is within a 1-minute walk of the Bank of England.
Headline deals
Republic, East India Dock, E14 was the second largest deal of the quarter behind Brookfield’s acquisition of 1 Bank Street. Telehouse, a subsidiary of Japanese telecommunications operator KDDI, purchased the Republic Campus in Tower Hamlets from LaSalle for £220M / £315 per sq ft / 7.05% NIY. The campus comprises four buildings providing education and office accommodation. The site also secured planning consent in 2023 for an expansion to include residential accommodation and a data centre which Telehouse will develop and occupy.
Republic, East India Dock, E14
The Worship Street Estate, EC2 was purchased by Frasers Group in partnership with Roca from the City of London Corporation for £75.15M. We understand the Estate attracted substantial interest and received several offers, which demonstrates the strength of demand for prime repositioning opportunities. The Estate is also strategically positioned to the north of Finsbury Square and is well positioned to benefit from strong occupational demand in the Liverpool Street station area.
The Worship Street Estate, EC2
51 Eastcheap, EC3 was sold to Middle Eastern firm Blacksands for £70M in an off market transaction. The building is entirely let to WeWork and was purchased from a JV between Polus Capital Management and Greycoat, who had acquired the asset out of receivership in August 2024 for £45M.
51 Eastcheap, EC3
Direction of Travel
Sustained global geopolitical volatility continues to fuel the unpredictability of interest rates, hampering investment activity. Q4 2025 saw decreasing interest rates and increased investment activity leading to the highest volumes reached since Q3 2022, however, almost a year on, the volatility in global markets has caused activity to drop off and it is unlikely we will witness the volumes achieved in Q4 2025.
The main impact of this volatility is the chronic lack of supply driven by a stark pricing divide between sellers and buyers. Sellers remain anchored to historic valuations and are generally reluctant to crystallise losses unless under pressure to transact. Buyers continue to price in higher financing costs, build costs and overall greater business plan execution risk with little certainty on the horizon.
Fortunately, London continues to be viewed as a safe haven for investment, Allsop is tracking several large transactions in the City such as DUO (£325M) and GPE’s 2 Aldermanbury Square, which is reportedly under offer for £440M, reflecting c.5.2% NIY and c.£1,300 per sq ft. Both deals would continue to highlight the depth of demand for prime best in class City assets, where a shortage of high-quality investment opportunities is supporting competitive tension and comparatively resilient pricing.
Looking ahead, we expect investment volumes to remain subdued in the near term, with the timing of a more meaningful recovery largely dependent on greater stability in global markets and the interest rate environment. Nevertheless, the underlying fundamentals of the City of London office market remain compelling, with constrained supply, strong occupational demand and continued appetite for best-in-class assets providing a solid foundation for recovery once greater certainty returns.
