If it feels like more firms are buying the buildings they work in, you are not imagining it. CoStar Group counts 10 owner-occupier purchases across Britain so far this year, totaling above £1.3 billion, or about $1.8 billion. Analysts there say if the pace holds through year end, 2026 would set a new annual record.
This is not a brand new playbook. Citigroup bought its London base in 2019. What has changed is the calculus.
Office values have fallen in recent years as higher interest rates and post-pandemic working patterns reset demand. Concurrently, ten years of political turbulence in the UK combined with rising build costs have crimped new supply, lifting rents, particularly for prime space.
Barclays' June deal landed against that backdrop. After a difficult stretch following HSBC Holdings Plc's initial decision in 2023 to exit London's eastern business district, the leasing market has improved. According to individuals with knowledge of the talks, who requested anonymity because the details are sensitive, Canary Wharf Group is targeting rents exceeding £80 per square foot on newly available space.
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One of those people said that is roughly twice the about £40 per square foot Barclays paid. CWG declined to comment. A Barclays representative said the deal ensures the bank retains control of its headquarters after the lease expires and delivers "greater certainty over long-term occupancy costs."
It is not just rent pressure. Consultancy Turner & Townsend's data points to rising fit-out costs amid bottlenecks in supply chains and too few contractors. "The cost of fitting out offices today is incredibly high," Ed Bradley, CBRE Group Inc.'s head of central London office investment, said. When occupiers are lining up large Cat-B fit-out budgets, he added, "it gives them a reason to look to acquire the assets as well." Bradley added that further transactions may emerge in London, noting CBRE is now advising on in excess of a million square feet of owner-occupier demand.
State Street Corp. and State Bank of India chose to purchase their London offices last year. Outside London, Bank of New York Mellon Corp. acquired a Manchester office earlier this year for £114 million, and Lloyds Banking Group Plc purchased its Bristol offices for about £65 million.
For some, ownership is a way to lock in costs today and keep options open tomorrow. "The costs of moving have become astronomical," said Emma Steele, Savills Plc's director of global cross-border investment. She added that if values rebound, owning can be a springboard: "If you can do it, it's an amazing idea because at any point in time when the market improves, technically you can write your lease again to yourself from the start and then you can trade into a better market." For your wallet, the takeaway is simple enough: big occupiers are paying up now to control future bills, a sign those rent and fit-out pressures are real and still building.
