The final quarter of 2025 saw a surge in transactions, something reflected in the standout deals recognised in CoStar's latest Quarterly Agency Awards. But the boom was not enough to change an overall sense that last year was one of slow, stable recovery rather than a spectacular lift-off.
According to real estate consultancy Lambert Smith Hampton, UK commercial real estate investment hit a record £21.6 billion in Q4 2025, driven by Welltower’s £5.2 billion acquisition of the Barchester care home portfolio, one of the largest property deals ever in the UK. Even if that deal is excluded, the fourth quarter was still a lot stronger than 2025’s other quarters, with LSH reporting £48 billion for the year as a whole.
According to the adviser, all of the main sectors saw final quarter volume top their respective five-year quarterly averages for the first time since 2022. The living sector led the way with record volume of £10.6 billion, 76% above trend.
Offices had a major rebound with LSH reporting UK-wide volume lifted by 156% quarter-on-quarter, from the third quarter’s five-year low, to £3.9 billion. The return of large deals was key, with eight £100-million-plus transactions compared with only one in the third quarter. These was topped by Ellison Institute of Technology’s £890 million investment in Oxford Science Park, a worthy winner of CoStar's top investment deal.
Volume also doubled quarter-on-quarter across the retail and industrial sectors.
While it seems unlikely those figures will be bettered in the coming few months, moving into 2026 the wider sense of stability is providing comfort that the building blocks are in place, alongside a better macroeconomic story around interest rates and inflation, for a stronger recovery.
Savills began the year by predicting commercial real estate volumes in 2026 are likely to rise 10% from the £50 billion it recorded in 2025 to £55 billion.
Knight Frank at the beginning of February said London had already moved from "recovery to performance". The adviser said investment turnover for the capital's offices increased over the year by 45% to £9.3 billion in 2025, and it is now forecasting £12 billion of investment in 2026.
It has data to back this up. The final quarter accounted for £3.25 billion, the highest quarterly total for 13 quarters. And Knight Frank points out that there were 25 London office deals over £100 million in the year, including eight above £250 million, compared with none in 2024.
Leasing-wise, a surge in large-scale demand propelled overall London office take-up to 12.1 million square feet across 1,400 deals in 2025, the capital’s strongest performance since the start of the pandemic. And rents for the most prime space in all commercial asset classes are breaking records across the country.
In industrial, lettings of big-box units reached close to 31 million square feet in the industry's best performance since the height of the pandemic, DTRE data finds. Some 6.4 million square feet of big-box sheds were let in the final quarter of the year, meaning total take-up for the year reached 30.9 million square feet, while the vacancy rate ended on 6.9%, below 7% for the first time in more than two years.
For investment, DTRE reports £3.8 billion of big-box sheds traded in the final quarter of the year, making it the strongest three-month period since the first quarter of 2022. Investors are eyeing larger ticket sizes, with seven transactions of circa £200 million or more accounting for 82% of investment volumes in the final quarter. The largest deals involved portfolio buys and merger and acquisition activity with less than £2.5 billion of single-let sheds sold, the lowest total for more than a decade.
The final quarter was also one of out-of-the-ordinary transactions in areas of commercial real estate that do not always grab headlines. Not just the Ellison Institute investing in expanding a science campus or Welltower's care home transaction, but at the end of the year EY completing a regear of its 400,000-square-foot offices at the More London development.
Major deals are happening, just not always in traditional places, and UK real estate advisers are, as always, making them happen.
Top sale
Larry Ellison's Institute for Technology lights up Oxford's tech corridor
American tech billionaire Larry Ellison, the founder of computer giant Oracle, is no stranger to making decisions that move markets.
Last quarter, his Ellison Institute of Technology provided a huge boost to the UK's "golden triangle" for science and research and, in particular, for Oxford when it invested £890 million in acquiring and expanding the westside of Oxford Science Park.
The new investment takes the EIT campus in Littlemore from 300,000 square feet to 2 million square feet, a commitment expected to have a huge knock-on effect for the area. The focus is making sure the park is a world-leading home for ambitious, groundbreaking science. Many satellite and aligned companies are likely to cluster around it and lease space nearby.
The vendor was a joint venture between Oxford's Magdalen College and the Singaporean-based sovereign wealth investor GIC, advised by Savills and DTRE.
Top office lease
Canary Wharf's best year in a decade topped off by Visa move
One of the biggest real estate stories of last year was the turnaround in perceptions of Canary Wharf, London's famous offices district.
During the pandemic, the Docklands estate became something of a byword for negative sentiment towards offices, particularly because of some big-name leavers. Last year, that all changed, as more than 750,000 square feet of office transactions were announced, the estate's best office leasing year in more than a decade. The standout deal was credit card business Visa taking 300,000 square feet of offices on a 15-year term at the landmark One Canada Square tower. Not just because it was one of the largest deals in London all year, but because the business is relocating its European headquarters from Paddington to Canary Wharf in the summer of 2028.
JLL and CBRE advised Canary Wharf Group while CBRE advised Visa.
Top Industrial Lease
Panattoni extends customer relationship for South East blockbuster
Panattoni, the global privately owned industrial developer, is always there or thereabouts when it comes to the biggest industrial letting in the CoStar Awards.
As 2025 drew to a close it did not disappoint, signing the largest prelet of the year in the South East.
The transaction saw ID Logistics Group, the international contract logistics group, take the 440,167-square-foot speculative S440 unit at Panattoni Park Sittingbourne in Kent. The park is about four miles from Junction 5 of the M2, positioned between London and the Port of Dover, well placed for the national distribution and port-linked logistics networks.
It is another example of the company building on a good relationship with an occupier. ID Logistics is a global customer of Panattoni and has operations across several European markets. The latest lease increases the total space occupied by the group at Panattoni Parks to more than 1.8 million square feet.
Savills, Avison Young and CBRE are letting agents at the estate. CBRE advised ID Logistics.
Top Retail Lease
Primark shops for Derby flagship
International fashion retailer Primark was back on the acquisitions trail in 2025, including securing the CoStar top retail lease in quarter four.
The group has leased 40,000 square feet at Derbion shopping centre in Derby in the East Midlands, and intends to move from its store on Cornmarket in the city when the site is ready to occupy in the first half of 2027.
The joint investment by Derbion – the syndicate that has owned the mall since prior owner Intu collapsed into administration – and Primark included the management team relocating the brands that had occupied the space such as Superdrug, H Samuel, The Perfume Shop and Iceland to newly fitted-out stores in other units.
Along with many of the UK's other large malls, 2025 was a good year for leasing at Derbion with new lettings including Victoria’s Secret, Seasalt and Luke 1977. Other brands such as Footlocker, Pandora and Moss have upgraded their stores.
FHP Property Consultants advised Derbion.