Top-rated workspaces in Central London sought after by UBS real estate analysts
Office Real Estate in Central London: A Golden Opportunity
The ** London office** real estate investment trusts (REITs), such as British Land, have become the "top pick" for analysts at UBS. As investors seek to diversify their portfolios and avoid the uncertainties of the US market, London has seen a surge of interest.
In the wake of President Donald Trump, the UK has emerged as a key beneficiary of property investors moving away from the US. REITs focusing on central London offices, including Great Portland Estates, Gladstone Land, and British Land, have all outperformed the European Real Estate Association's index substantially since April 2021.
UBS analyst Zachary Gauge explains that there's been an increase in interest for London office assets since the beginning of 2025, particularly from US capital seeking a cyclical opportunity. As the supply crunch for prime London offices continues to deepen, and evidence of strong prime rental growth occurs, Gauge suggests that the capital becomes increasingly attractive.
Gauge also attributes the increased interest in British real estate to "a warming of sentiment towards the UK on the back of the symbolic, if not material, trade deals".
British Land's Favorable Position
On the brink of publishing its full-year results, British Land is expected to have substantial upside to its consensus results among any of the REITs. According to Gauge, this is due to the continued strong performance in the retail warehouse sector and the anticipation that British Land's City office exposure will deliver a strong performance beyond the market benchmark numbers.
Gauge expects growth for the full year to be at the top end of their three to five percent guidance, with 2.5 percent estimated rental value growth in the first half.
Vacancy rates might be a point of focus in the results, given the half-year results show a vacancy rate of 13.3 percent in the West End and 23.6 percent in the City. UBS analysis suggests that British Land is trading at the cheapest level compared to other real estate trusts centered on the City, based on its 10-year market history.
In essence, strong demands for modern, sustainable office spaces in Central London, robust rental income growth, positive analyst outlooks, a focus on sustainability initiatives, and portfolio management strategies position British Land advantageously in the real estate market.
In the real-estate industry, British Land's City office exposure is expected to deliver a strong performance beyond the market benchmark numbers due to the continued strong performance in the retail warehouse sector and the anticipation of robust rental income growth. This advantageous position in the real-estate market is further supported by increasing demands for modern, sustainable office spaces in Central London, a warming of sentiment towards the UK, and a potential cyclical opportunity for US capital seeking to invest in the London office assets. Moreover, British Land is trading at a comparatively cheaper level compared to other real-estate trusts centered on the City, based on its 10-year market history.
