What was The Buzz in December?
Our monthly roundup of real estate industry news.
Here are a few of the stories that caught our attention in December.
London to lose half of its offices by 2030 amid surging demand, says Allwork
Half of London’s office buildings could be obsolete by 2030, with demand soaring and vacancy at historic lows, prompting calls for refurbishment and stricter planning to secure economic growth.
London has lost the equivalent of 28 Gherkin buildings in office space over recent years. Between 2018 and 2023, around 14 million sq ft of offices in the West End and the City were converted into hotels, flats, or student accommodation. Developers leveraged new rights to bypass full planning approvals, shifting their assets toward sectors they expected to perform better post-Covid, according to The Times.
Strong Demand Amid Limited Supply
Despite these losses, demand for office space is surging. Companies including PwC, Bank of America, and Disney are seeking a combined 10 million sq ft of offices — 7% above London’s historic average.
Vacancy rates for top-tier offices have dropped to historic lows of under 2%. Analysts predict that by 2028, no prime office space will remain available in the City, with a projected shortfall of 11 million sq ft across central London over the next five years.
Berkeley Estate Asset Management has secured planning consent for the transformation of former BHS store on Oxford Street
Berkeley Estate Asset Management has secured planning consent for the transformation of the former BHS and UAL College of Fashion site in London’s West End.
Located in the heart of Oxford Street, on an island site just one block west of Oxford Circus, the redevelopment of 33 Cavendish Square, will deliver circa 800,000 sq ft of Grade A office space.
Designed by KPF, the project will also deliver around 102,000 sq ft of purpose-built flexible retail space and circa 38,000 sq ft dedicated to cultural and creative activities, including a new auditorium and flexible event venues for conferences, product launches and fashion shows, alongside studios and workspaces to support creative, digital and technology businesses.
John Bushell, principal at KPF, said: “We are delighted to have received unanimous planning approval for 33 Cavendish Square. This development will be a distinctive expression of everything that makes the West End exceptional: world-class retail on one of the globe’s most iconic shopping streets, cultural spaces designed to host events from major product launches to conferences, and contemporary workspaces that continue to attract and inspire leading businesses. It will enhance the area’s long-standing reputation for creativity, commerce and culture, delivering lasting benefits for businesses, residents and visitors alike.
“This is a thoroughly modern building, designed to resonate with the best of the large buildings along Oxford Street, responding to their composition, scale and materiality. We carried out extensive analysis of the existing buildings to create a scheme that restores a coherent urban form and is an exemplary guardian of embodied carbon.”
Secretary of State approves Railpen’s one million sq ft Beehive plans
Railpen’s plans will transform Beehive into a world-class innovation park including workspaces for technology businesses, laboratories for research, a substantial new community park, a youth and community hub, science centre plus around 20 new shops, restaurants and cafés.
Major public transport upgrades are a central part of the plans and are slated to remove more than 10,000 cars from local roads. The development has also been conceived by Railpen to deliver significant positive social, economic and sustainable impacts, factors recognised by the Local Planning Authority through the application process.
Hayfin and Capreon purchase ‘Can of Ham’ office building in one of the largest 2025 office investment deals in London
Hayfin Capital Management (Hayfin) and Capreon have acquired the iconic 70 St Mary Axe ‘Can of Ham’ office building in the City of London from Nuveen Real Estate.
The 21-storey, Grade A office tower, which was developed by Nuveen and opened in 2019, reportedly sold for in the region of £335m to £340m making it one of the largest office investment deals in London so far this year.
The property is currently fully let to 13 blue-chip tenants, including multinational law firm Sidley Austin.
The transaction was majority-funded by Hayfin and supported by Capreon, with whom Hayfin has worked on real estate investments since 2017. Capreon will asset manage the building.
Carlos Colomer, managing director of Hayfin, said: “70 St Mary Axe is a truly landmark London office building and an attractive addition to our real estate portfolio. This prime asset has an iconic design and outstanding location. Occupier demand for top-tier City offices with strong sustainability credentials remains robust, tracking significantly above the long-term average, with the number of jobs in the Square Mile having risen by 25% since 2019 while future supply declines.
“This investment provides us with high quality exposure to this market, through a state-of-the-art space that supports collaboration and meets the needs of its tenants. We look forward to being continued stewards of this exceptional building after a highly successful period for the asset under Nuveen’s ownership.”
London seeing a ‘two track’ market with house prices falling in the most expensive areas
More than half of the Capital’s boroughs experienced a drop in property prices, analysis of figures from the Office for National Statistics (ONS) shows.
And the dip has hit the wealthiest council locations the worst, with 18 recording a price drop.
London as a whole saw a 2.4% reduction in prices in the year to October, according to the ONS, with the UK experiencing a 1.4% increase.
The City of London had a 18% fall, Kensington and Chelsea 16.5%, with a similar drop in Westminster, CityAM reports.
In Kensington and Chelsea the average price dropped to £1.19 million, the lowest in more than a decade, down from its highest level of £1.6 million.
