"It's not a question of whether offices are needed, but whether the existing stock meets the expectations of today's workforce, which has shifted significantly in recent years"
- Mahir Vachani - BPS London Developments
Only 18.2% of commercial property opportunities listed for sale across London have secured a buyer, according to new research by BPS London, pointing to a highly selective investment market across the capital.
The analysis, which assessed current commercial listings to gauge the proportion of assets under offer or sold subject to contract, found that while investor appetite persists, it is being deployed with far greater focus than before.
Demand splits sharply by sector
The headline figure masks significant variation beneath the surface. Leisure assets are attracting the strongest interest, with 75% of available opportunities having secured a buyer. Specialist assets follow at 54.2%, while build-to-rent stands at 30% and hospitality at 23.1%.
More traditional sectors are seeing steadier but more measured activity. Retail, which accounts for 44.5% of all available stock, has seen 19.7% of opportunities attract buyer interest. Industrial assets stand at 16%.
Offices present a more complex picture. Despite accounting for 33.6% of all commercial stock currently listed across the capital, just 14.7% of office opportunities are under offer, the lowest rate of any major sector.
What the data means for London's office market
BPS London argues the office sector's underperformance reflects a structural shift in how commercial space is being used, rather than a collapse in long-term confidence. Occupier expectations have evolved considerably, with businesses placing greater emphasis on flexibility, design, amenities and workplace experience. Much of the existing office stock no longer meets those requirements, creating a disconnect between supply and what investors are willing to back.
That gap also represents an opportunity. Developers able to reposition well-located buildings stand to benefit as demand for high-quality workspace continues to recover.
BPS London recently moved on that thesis alongside Purestone Capital, completing the acquisition of a West End office building on Tottenham Court Road in Fitzrovia. The joint venture marks the first acquisition for their value-add investment platform, with plans to transform the building into a workspace aligned with modern occupier requirements.
"What this data highlights is just how selective the market has become," said Mahir Vachani, director at BPS London Developments. "Investors are no longer taking a broad approach across commercial property; they are targeting specific sectors and assets that align with long-term demand. At the same time, the office sector is undergoing a period of transition."
"It's not a question of whether offices are needed, but whether the existing stock meets the expectations of today's workforce, which has shifted significantly in recent years. Our recent acquisition on Tottenham Court Road reflects our belief that there is a clear opportunity to reposition well-located office buildings to deliver the kind of high-quality, experience-led workspace that businesses now require."
What happens next for London commercial property
With leisure and specialist assets continuing to outperform and office stock lagging, the London commercial property investment market looks set to remain polarised in the near term.
The direction of travel for offices will likely depend on the pace at which older stock is either repositioned or withdrawn from the market, and whether occupier demand continues to recover. Investors with the ability to identify and reposition underperforming assets in strong locations may find more opportunity in that gap than the headline figures suggest.
