Private equity firms and sovereign wealth funds are spearheading a dramatic rebound in London’s retail property market, with Savills forecasting over £2bn ($2.7bn) in investment across central London in 2025, the highest level since 2018, according to Bloomberg sources.

This resurgence has been most prominent in the West End, which accounted for £495m of the total in the first half of the year, marking a 19% year-on-year rise. The area’s appeal is strengthening due to long lease structures, low capital expenditure requirements, and a favourable debt environment.

“We’re seeing a marked resurgence in investor appetite for Central London retail, particularly in the West End,” said Charlie Stoneham, associate director of central London investment at Savills.

The return of footfall and international tourism is being bolstered by plans to regenerate Oxford Street, including a proposed pedestrianisation initiative led by London Mayor Sadiq Khan. A recent public consultation found that 70% of respondents supported the regeneration, with two-thirds backing full pedestrianisation.

The favourable conditions have already translated into key transactions, including Royal London Asset Management’s £63m sale of a mixed-use property at 149-151 Oxford Street. That deal marks the first owner-occupier acquisition on Oxford Street since Ikea’s investment arm acquired the former Topshop flagship store for £378m in 2021.

Marie Hickey, director of commercial research at Savills, noted that pedestrianisation is directly encouraging deal activity.

With the West End bouncing back post-pandemic and retail vacancies declining, investors are capitalising on the opportunity to secure prime assets in one of the world’s most iconic shopping destinations. Several additional acquisitions are expected to close in the second half of the year.

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