Europe’s Big Investors Return to Offices as £200m-Plus Deals Signal Market Rebound

Jan 4, 2026 - 20:00

After two bruising years defined by collapsing valuations, rising interest rates and remote-working uncertainty, Europe’s commercial property market is showing unmistakable signs of life. Large institutional investors have returned to the office sector, driving a surge in nine-figure transactions across London and major continental cities — and signalling what many believe is the start of a structural recovery.

In central London alone, 21 office transactions worth more than £100m had been completed by mid-December, almost double the 12 recorded across the whole of 2024. Even more striking, nine buildings sold for more than £200m, compared with just one the previous year — an extraordinary turnaround for a sector that only recently was considered toxic by global capital.

The resurgence is not simply about volumes. According to data from Savills, large transactions now account for 53 per cent of total sales in central London, up from just 27 per cent a year earlier. This concentration of capital at the top end of the market is a classic signal that institutional confidence is returning.

“Investors are feeling more confident about putting money back into this space,” said Oliver Bamber, director for central London investment at Savills. “Domestic funds and institutions in particular are starting to believe the worst of the repricing cycle is behind us.”

A supply crunch is reshaping the market

What has changed is not just sentiment — it is supply.

Across London, Paris, Frankfurt and Amsterdam, new office construction has collapsed as developers retreated amid higher borrowing costs and uncertain tenant demand. Yet corporate occupiers have not disappeared. Instead, demand has become increasingly concentrated in prime, high-spec, energy-efficient buildings that meet new sustainability rules and modern working standards.

That mismatch — shrinking supply of Grade-A space versus stabilising corporate demand — is now driving rents higher and pulling capital back into the market.

This shift mirrors broader structural forces in Europe’s economy, from sustainability-driven investment to corporate flight toward premium locations, themes European Business Magazine has tracked closely across its coverage.

Big money is flowing again

The rebound is not limited to London. Across continental Europe and the UK, 12 office transactions worth more than €100m were underway by mid-December, with a total value of €2.7bn, according to MSCI. That compares with €1.87bn at the same point last year and €1.65bn in 2023 — a powerful indication that capital is rotating back into European property.

These are not speculative buyers. They include:

Pension funds
Insurance companies
Sovereign wealth funds
Domestic institutional investors

These groups typically move only when they believe risk is falling and yields are stabilising — which suggests Europe’s office sector may finally be emerging from its post-pandemic hangover.

West End becomes the new battlefield

Nowhere is this clearer than in London’s West End, where some of the biggest deals are being struck.

Savills is advising on the sale of St Christopher’s Place, a mixed-use office, residential and leisure estate, and Stirling Square, a prime office building. Both are expected to sell for more than £200m, making them among the largest real estate trades in Europe this year.

These assets sit at the intersection of:

prime retail footfall
luxury residential demand
high-grade office space

They are exactly the kind of “safe-haven” real estate investors are now prioritising.

This concentration of capital into ultra-prime locations echoes the broader trend seen in European markets, where money is flowing to quality rather than quantity — a pattern also visible in sectors like technology, defence and infrastructure.

Why this matters for Europe’s economy

The office market is not just a property story — it is a barometer of Europe’s economic confidence.

When institutional investors are willing to deploy hundreds of millions of pounds into long-dated office assets, they are implicitly making a bet on:

employment growth
corporate expansion
urban regeneration
financial stability

That helps explain why property investment is closely tied to broader capital flows tracked across European Business Magazine’s Markets and Finance coverage.

It also reflects how Europe’s cities are repositioning themselves. Post-pandemic, offices are no longer just places to work — they are hubs for innovation, culture and collaboration, closely linked to the rise of AI, data centres, and the knowledge economy.

A two-speed recovery

The recovery, however, is uneven.

Secondary offices in poor locations or with weak energy performance continue to struggle, while prime assets are being bid up aggressively. This two-speed market is forcing landlords to either invest heavily in upgrades or risk obsolescence.

Europe’s new environmental and building standards are accelerating this divide — part of the regulatory transformation tracked in EBM’s coverage of European sustainability and industrial policy.

In other words, Europe’s office rebound is not a return to the past — it is a reshaping of the market around a new, higher-quality equilibrium.