Top sales and leases recognised in the UK

A year that got off to a solid start for commercial real estate investment – producing plenty of standout deals recognised in CoStar's latest quarterly agency awards – has seen sentiment knocked by the volatility in financial markets caused by war in Iran. It's too soon to know if this will have a prolonged impact on transaction activity.

Lambert Smith Hampton's UK Investment Transactions report found that total investment volume in the first quarter indeed reached £10.8 billion – a healthy figure, if not the rebound many would have been hoping for as 2026 got underway.

As LSH reports, it is well below the record £21.6 billion recorded in the final quarter of 2025 but 16% higher than the first quarter last year and only 13% below the five-year quarterly average. There is no clear evidence, then, that the Iranian war has dampened activity.

The same could be said of the occupier markets.

According to DTRE, there was 7.45 million square feet of take-up in the industrial sector across the UK, the strongest first quarter since 2022 and 19% up on the pre-Covid boom quarterly average. That came alongside a very quiet first quarter of investment at £913 million – 17% down on last year.

Knight Frank data shows that 680,000 square feet of offices was transacted in the first quarter of 2026 in the South East of England for instance, a 1.2% increase on the final quarter of 2025, extending the region’s strongest run of leasing activity since 2019. But that demand was focused almost entirely on prime, new space. For key regional cities such as Manchester, Leeds and Birmingham it has been a solid start at best.

In the retail sector, Savills reports that national shopping centre vacancy edged up modestly to 16.9% in the first quarter, from 16.3% in the fourth quarter of 2025, while headline rents fell slightly.

So where do things stand? LSH points out that although the outbreak of conflict in the Middle East at the end of February unsettled financial markets, transaction activity held up through the remainder of the first quarter. The number of deals above £1 million was broadly in line with average levels and improved as the period progressed, according to its figures. March was the quarter’s strongest month for deal count and volume, rising 11% and 31% respectively on February.

At the same time there is a gathering concern that the damage to global energy infrastructure will have a lasting negative impact on inflation and that will hit investor confidence. And volatility in swap rates since the war began means investors could be forgiven for pausing deals before locking in debt terms.

Despite the complex nature of the developing situation there were still plenty of major deals recorded in traditional sectors, and some innovative ones linked to emerging sectors such as artificial intelligence and data centres.

And there are many who believe the recent global instability only underscores the appeal of real estate, particularly long-term, income-producing assets, while the UK continues to benefit from its reputation as a global safe haven.

Daibiru blockbuster buy points to emerging Japanese interest in UK real estate

The first quarter saw a healthy number of £200 million-plus acquisitions get over the line. Colliers reports that some £1.9 billion worth of central London offices sold in the first quarter, with £1.5 billion forecast for the second quarter.

In addition it says March turnover was up 50% month-on-month, and over £1 billion transacted post 28 February, significantly higher than average.

The biggest transaction, at £300 million, was the acquisition by Japan's Daibiru Corporation of a major stake in Warwick Court, the former Goldman Sachs offices in the City of London.

For various reasons to do with demographics and a desire to diversify global investment beyond North America there is a view that the UK is emerging as the premier destination for Japanese investment in Europe.

Helpfully, Daibiru said London’s office market remains highly attractive due to its "strong liquidity and transparency as a core market" and added that "even after Brexit, the City has maintained its position as a leading international financial centre".

Savills advised on the sale.

It's a legal matter for British Land with Herbert Smith mega letting

Law firms have been particularly active acquirers of prime office space in London in recent times. Herbert Smith Freehills Kramer's decision to prelet 267,000 square feet at British Land and Singaporean wealth fund GIC's proposed 1 Appold Street development at the Broadgate Campus in the City of London, in a transaction revealed by CoStar News, is the largest such move for over a year.

It's also the second largest office letting to complete for more than a year after JP Morgan Asset Management secured US investment management firm Squarepoint for a prelet of the entire 400,000-square-foot 65 Gresham Street development, as also revealed by CoStar News.

Designed by Piercy & Company, 1 Appold Street is one of the last major redevelopments planned on the Broadgate Campus and proposes retaining 75% of the existing 1980s office building, while adding five floors to make 13 storeys.

CBRE and JLL represented the landlord. Cushman & Wakefield represented the tenant.

Farmfoods tucks into former Amazon site for 800,000-square-foot move

While it was a muted first quarter for industrial investment, as per DTRE's figures above, it was another stellar one for take-up.

The largest transaction was that of frozen food and grocery chain Farmfoods, which fully leased Logicor's largest UK warehouse development taking 800,000 square feet across three units at Logicor Park Daventry.

The tenant will use the three units for frozen and ambient storage, transportation and recycling. Logicor outlined plans to build 800,000 square feet of warehouses at the former XPO Amazon site in 2023.

DTRE, JLL and Apex Real Estate advised Logicor.

Landsec limbers up in Finchley with Third Space letting

Not content with getting one of the UK's largest office lettings of the past year over the line, with BP taking 192,000 square feet at Timber Square in London, as revealed by CoStar News, Landsec landed a major retail and leisure letting further to the north in the capital.

Third Space, the London-based luxury health club operator, has more than a dozen locations now after it signed a lease for 50,000 square feet at the O2 Centre on Finchley Road.

The Finchley site is one where Landsec is pursuing a major residential scheme on adjoining land as it pivots its business in particular towards residential and large shopping centres.

Bruce Gillingham Pollard represented the landlord. P-Three represented the tenant.