American Investors Return to London Property Market as Prices Hit Bottom

US property investors are making a significant comeback to London’s commercial real estate market, particularly targeting prestigious office buildings at what they perceive to be bottom-of-market prices. Following a two-year hiatus, American buyers and family offices are actively pursuing prime properties, especially in London’s distinguished West End district.

Data from property analytics group CoStar reveals that while London’s overall office transactions dropped to a 20-year low of £6 billion in 2024, the Mayfair and St James’s districts witnessed deals worth £1.4 billion – more than double the previous year’s figures and reaching an eight-year high. The proportion of American buyers in London office sales jumped from 4 per cent in 2023 to 12 per cent in 2024.

Notable transactions include Realty Income’s £126 million acquisition of 3 St James’s Square, Oval Real Estate’s £125 million purchase of 14 St George Street, and Global Holdings’ £70 million investment in Vogue House. The market also saw Blackstone’s unsuccessful £300 million bid for 70 St Mary Axe, commonly known as the Can of Ham.

East Asian investors, particularly from Hong Kong and China, have emerged as primary sellers in this market shift. A notable example is Chinese Estates’ sale of their St James’s Square property to the Ellison Institute of Technology for £162 million, representing a loss on their 2017 purchase price of £175 million.

The renewed American interest stems from a 15 per cent average decline in West End office values since their 2021 peak. Property specialists anticipate continued growth in rental values for modern, environmentally friendly buildings in prime locations, with Knight Frank estimating £5 billion of overseas investment targeting prime London offices in 2025.