National investment overview

Encouragingly, there was a 43% quarterly increase in Big Nine investment volumes in Q2 reaching £314m. This brings H1 volumes to £533m, 7% up on the same period last year. Whilst H1 volumes remain significantly below historic trends, transaction numbers indicate improving sentiment with 46 transactions recorded so far this year, the highest H1 level since 2022.

Buyers are increasingly stepping forward ahead of anticipated price increases, indeed, the rate of MSCI capital growth declines across Rest of UK Offices are gradually slowing with -0.6% declines in June ’25 versus -1.04% 12 months ago.

The largest transaction of the quarter was Melford Capital’s acquisition of M&G’s 101 Embankment, Salford for £75m reflecting a NIY of 8.45%. This marks Melford Capital’s second significant transactions in the UK regions in under a year following their acquisition of EQ, Bristol for £103m in Q4 2024.

Overseas investors continue to command the largest share of investment activity accounting for 31% of transactions over the last 12 months (Jul ’24 – Jun ’25). UK Institutions have increased their share of volumes from 7% over the previous 12-month period (Jul ’23 – Jun ’24) to 20% in the last 12 months.

Despite a recent jump in inflation figures to 3.6% in June, up from 3.4% in May, the Bank of England is widely expected to continue their policy of cutting interest rates. A weakening economic picture, underpinned by a slowing labour market and weak GDP data is set to place further pressure on the BOE’s Monetary Policy Committee to prioritise growth over fighting inflation with two further base rate cuts expected in H2. This will strengthen investor confidence, resulting in an uptick in investment activity over the remainder of the year.