The latest central London retail leasing research from international real estate advisor Savills reveals a significant uptick in investment into Central London’s retail sector, with volumes reaching £1.6 billion in the first half of the year.
This marks a 130% year-on-year (YoY) increase and sits 101% above the 10-year H1 average, already surpassing full-year 2019 totals. Continuing this momentum, Savills anticipates that 2025 could exceed £2 billion in retail investment, the highest annual figure since 2018.
Focusing on key retail streets across the wider West End, Q2 investment volumes were largely in line with Q1 bringing volumes for the first half of the year to £495 million, which is 19% up YoY and with a number of known acquisitions expected to complete in second half of the year. Full-year volumes are projected to exceed the £523 million transacted in 2024, which is being driven by heightened activity on Oxford Street, supported by improving occupational metrics and a more favourable debt environment.
Charlie Stoneham, associate director, Central London Investment, comments: “We’re seeing a marked resurgence in investor appetite for Central London retail, particularly in the West End. Sovereign wealth funds and private equity are increasingly active, drawn by the sector’s compelling fundamentals – long, landlord favourable lease structures, resilient footfall, and relatively low capital expenditure requirements. The recent uptick in owner-occupier acquisitions also signals a shift in sentiment, with businesses committing to long-term presence in prime retail locations.”
This is evidenced in the off-market acquisition of 149-151 Oxford Street in Q2 by an owner-occupier, where Savills advised Royal London Asset Management, demonstrating occupier confidence and long-term capital commitment to the street. This is the first owner-occupier acquisition on Oxford Street since Ingka Investments, the investment arm of Swedish brand Ikea, purchased 214-218 Oxford Street in 2021, part of which now accommodates an Ikea store.
Marie Hickey, director of research at Savills, adds: “There are a number of factors supporting the renewed appeal of Oxford Street to investors and occupiers alike with the pedestrianisation of the street, envisaged by the end of 2028, to be an added attraction. Likewise, the scale and quality of development on the street in recent years is delivering best in class retail and office space, all culminating to create compelling investment opportunities that will underpin momentum into the second half of the year.”
