March sees 10 deals as Q1 finishes with £743 million of turnover
March saw a steady flow of investment activity, with £376.9 million of turnover across 10 deals, including the second £100 million+ transaction of the year and three further transactions over £50 million. This brings the Q1 2026 volume up to £743.3 million across 24 deals, reflecting an average lot size of £30.97 million.
Although the number of deals so far this year is 50% higher than at this point last year and 6% above the five-year average, the relatively low average lot size means that this quarter’s overall transaction volume reflects a 25% decrease from Q1 2025, and a 53% fall when compared to the five-year average. As ever, this is largely a result of subdued activity in the £100 million+ lot size range, with only two deals of this scale transacting so far this year.
On 19 March, the Bank of England’s Monetary Policy Committee voted unanimously to maintain the base rate at 3.75%. At the end of March, Savills is tracking a further £1.88 billion of under-offer stock across 29 deals.
In the largest deal of the month and the second £100 million+ transaction of the year, AOG Real Estate sold the freehold interest in 45 Cannon Street, EC4, for £114 million. Located directly opposite Mansion House station and within a five-minute walk of St Paul’s and Bank, the property consists of a 2017 development comprising 92,224 sq ft of Grade A office and retail accommodation arranged over basement, ground and seven upper floors, with exceptional terrace views across the City of London.
The property is fully let to two office and four retail tenants at a passing rent of £6.30 million per annum, reflecting £68.30 per sq ft overall and provides a WAULT of 7.24 years to expiries and 7.05 years to breaks. The freehold interest sold for £114 million, reflecting a 5.4% net initial yield and was acquired by the anchor tenant in the building, Global Relay UK Ltd, which occupies floors 3–7 and accounts for 61% of the contracted income until its lease expiry in December 2034.
The deal marks another example of the owner-occupier trend of buying their own buildings, which has become increasingly prevalent over the last 12 months and is the largest deal of that type since State Street Bank acquired 100 New Bridge Street for its own occupation in April 2025 for £330 million.
In another major deal, Savills sold the long leasehold interest (114 years at a peppercorn) in Fetter Yard, 86 Fetter Lane, EC4, on behalf of Europa and Hobart, to Ares. Located on the west side of Fetter Lane in a core Midtown location, the property was comprehensively refurbished in 2022 to a high specification and comprises 104,652 sq ft of office and retail accommodation with a large landscaped courtyard and demised terraces.
The property is multi-let to five office and two retail tenants at a topped-up rent of £5,956,509 per annum, reflecting £56.92 per sq ft overall, and provides a WAULT of 10 years to expiries and 6 years to breaks. Marriott Hotels is the principal tenant in the building and occupies the third and fourth floors, which account for 29% of the overall income.
The long leasehold interest was acquired by American private equity firm Ares, which marks its first acquisition in the City market since it purchased the long leasehold interest in 25 Charterhouse Square, EC1, for £43.5 million in March 2024.
In another deal of a similar size and location, the long leasehold interest (175 years at 5% gearing) in 70 Chancery Lane also traded for £74 million. Occupying a prominent island site at the junction of Chancery Lane and High Holborn, the property was newly refurbished in 2024 to provide a 77,812 sq ft office, retail and residential building benefitting from an EPC A rating.
The property produces a net rent of £4,396,444 per annum, reflecting £60.57 per sq ft overall, with nine residential units let on ASTs, seven retail tenants, and the principal office element, which accounts for 80% of the income and is single let to WSP UK Limited on a lease expiring in June 2039 with no breaks, thereby providing a WAULT of 12.4 years to expiries and 11.9 years to breaks. Folkestone Estates sold the long leasehold interest to German fund HIH for £74 million, reflecting a net initial yield of 5.56% and £951 per sq ft.
Given the volatile geopolitical climate, the short-term momentum of the City investment market will depend on wider factors not necessarily within buyers’ or sellers' control.
Ed Robinson, City Office Analyst, Commercial Research
Despite a relatively quiet Q1, Savills is currently tracking £1.88 billion still under offer across 29 deals, including five £100 million+ deals, alongside £5.09 billion of available stock across 81 deals. However, with large proportions of those figures comprising bigger deals well in excess of £100 million+, the headline volumes for the City market will be dictated by whether those larger deals ultimately transact. Given the volatile geopolitical climate, the short-term momentum of the City investment market will depend on wider factors not necessarily within buyers’ or sellers' control.
The West End prime yield remains at 3.75%, while the City prime yield stands at 5.25%.