The final quarter of 2024 was a busy one for UK commercial real estate investment and leasing, as it so often is, and the stand-out transactions recognised in CoStar's Quarterly Agency Awards reflect this.
Make no mistake, the better figures offered some relief after a tough year overall. But the first month of 2025 has yet to provide certainty that better times are on their way.
LSH reports that the final quarter chalked up the strongest investment figures since the third quarter of 2022 with £13.1 billion of assets changing hands, 11% above the quarterly average.
The living sector was once again at the heart of activity with £4.4 billion of assets changing hands. Hotels also had a very strong quarter with £1.5 billion traded, lifted by CoStar's top sale – Baupost Group and KKR’s £869.2 million acquisition of the ADIA Marriott hotels portfolio.
Carter Jonas reports that the only sector where investment transactions retracted quarter-on-quarter was industrial. Despite what it termed "rebounding" activity, Carter Jonas's figures, based on CoStar data, calculate a rolling annual total exceeding £40 billion for the first time since the second quarter of 2023, but 23% below the five-year average of £53.5 billion.
The occupier story continues to defy the tougher environment in capital markets, at least for the best offices, sheds, shops and hotels. CoStar data shows that national office take-up reached a post-pandemic high in the final quarter of 2024 with just under 12 million square feet leased, up 22% on the previous quarter and a 26% jump on the same quarter in 2023.
These buoyant trends have taken a bit of a knock at the beginning of 2025 as volatility in bond markets and concerns about the pace of economic growth and the speed of interest rates cuts have, anecdotally, put some transactions on hold. At the same time, a series of major global investment commitments to the UK, and in particular London offices, suggest the deepest pockets are looking past such concerns.
Top Sale
KKR and Baupost check in with landmark Marriott hotels transaction
The hotel investment market had a very strong fourth quarter, while, according to Carter Jonas, US investors continued to have the highest share of overseas investment across all sectors, completing around £3.4 billion of acquisitions, above the £2.1 billion spent in the previous quarter. No surprise, then, that the standout transaction involved both.
In December, US private equity giant KKR and The Baupost Group completed their joint acquisition of a portfolio of 33 Marriott International hotels. The portfolio is the remnants of an even larger 43-hotel portfolio that the Abu Dhabi Investment Authority bought from the Royal Bank of Scotland for £640 million in 2013. RBS sold the assets after seizing them in June 2011 from Delek Global Real Estate, Quinlan Private and Igal Ahouvi, which had paid £1.2 billion for the portfolio in 2007.
In a major commitment to the European hospitality sector, KKR said the acquisition means it is now the largest owner of premium-segment Marriott International hotels in the Europe, Middle East and Africa region.
Eastdil Secured advised ADIA.
Top Office Lease
Moody's rates CBRE IM sustainable City of London office refurbishment highly
CBRE Investment Management's lease of 110,862 square feet of offices to ratings agency Moody's emphasised two clear trends in 2024.
The first is the desire for occupiers to move to the newest and most environmentally sustainable buildings. Secondly, as with other large corporates. Moody's took an option on a further 32,403 square feet at the building at 10 Gresham Street in the City of London. The good news for landlords is occupiers, in taking options to provide flexibility as they get their heads around the changing nature of office use, are subsequently taking up those options.
The letting sees the global provider of data, intelligence and analytical tools relocate its European headquarters from Canary Wharf and the iconic One Canada Square tower, where it has been since 2009, to the ultra-sustainable refurbished building.
Knight Frank advised CBRE IM and Cushman & Wakefield advised Moody’s.
Top Industrial Lease
B&M shops for North West's largest speculatively developed warehouse
CoStar News revealed in October last year that Cain International was in talks to sign value retail chain B&M Retail for a 674,000-square-foot distribution warehouse at Link 674 at Ellesmere Port in Cheshire, in one of the biggest UK industrial lettings of the year.
The warehouse is the largest speculatively developed warehouse in the North West and is on Link Logistics Park, a prime multimodal development in the Liverpool City Region Freeport Zone which brings multiple tax and planning benefits to occupiers. The transaction was confirmed as completed in December.
B8 Real Estate, CBRE and Moriarty & Co acted for Cain and Firethorn Trust, while B&M was represented by Savills.
Top Retail Lease
Uniqlo takes first Liverpool city centre store at mega mall
The Liverpool One shopping centre has been much in the news in recent weeks.
As revealed by CoStar News, the mall was the focus of the biggest single-asset retail transaction of last year when Landsec completed its acquisition of 92% of the mall in December for £490 million.
In addition, Japanese fashion retailer Uniqlo continued a busy period taking space across the UK by signing for a 25,441-square-foot store at 88-90 Paradise Street in the mall. The transaction was completed by Grosvenor, the mall's developer and asset manager before Landsec's acquisition, and represents Uniqlo's first store in the city centre.
Metis and CBRE acted for Liverpool One. Paddy McCormack acted for Uniqlo.