Q4 2025 saw record quarterly volume, fuelled by the largest property deal ever seen in the UK, according to Lambert Smith Hampton’s latest UK Investment Transactions (UKIT) report.

Download the latest UKIT Q4 2025 report here in full →

2025 ended in spectacular fashion in Q4, as investors shrugged off Budget uncertainty and capitalised upon improving confidence around values and the lending market. Record volume of £21.6bn was fuelled by the largest property deal ever seen in the UK, Welltower’s £5.2bn acquisition of the Barchester care home portfolio, alongside its £1.2bn purchase of the HC-One operated care homes portfolio. Q4 also delivered the strongest-ever quarter-on-quarter rebound in volume, jumping 145% from Q3’s below-trend outturn.

But even if the two colossal care home deals are discounted, Q4 was still substantively stronger than 2025’s prior quarters. Large-scale transactions soared in Q4, with the number of £200m+ deals quadrupling from Q3 to 20, while the number of transactions also rose, albeit by a modest 7% q-on-q, denoting improving depth to activity.

For the first time since 2022, all of the main sectors saw Q4 volume run ahead of their respective five-year quarterly averages. Given Welltower’s moves in the care home space, this was led by living, where record Q4 volume of £10.6bn was 76% above trend.

However, offices also saw a substantial rebound, indicative of much-improved sentiment returning to the sector after a long period of price discovery. UK-wide office volume surged by 156% q-on-q from Q3’s five-year low to £3.9bn.

Volume also doubled q-on-q across both the retail and industrial sectors, reflecting impressive activity in particular sub-sectors. In retail, shops volume trebled q-on-q to a decade high of £1.4bn in Q4, due largely to a string of supermarket sale-and-leasebacks from Asda. Meanwhile, in industrial, distribution warehouses volume quadrupled to a four-year high of £2.5bn, anchored by Tritax Big Box REIT’s £1.0bn acquisition of the Project Centurion portfolio from Blackstone, the second largest UK industrial transaction on record.

Overseas capital played a central role in Q4’s record, with inflows more than doubling q-on-q to a record £13.2bn. Reflecting Welltower’s acquisitions, this was dominated by North American investment, with inflows of £10.1bn making up 75% of total overseas purchasing. But domestic buyers also played their part. Following 14 consecutive quarters of net selling, institutional purchasing surged to a four-year high of £2.5bn in Q4, reflecting net purchasing of £1.0bn. Similarly, REIT purchasing of £2.0bn was 80% above average, boosted by Tritax Big Box’s major acquisition.

While sentiment has improved, the cross-sector average prime yield was broadly stable in Q4, hardening by 3bps to 5.55%. This small shift was driven by a 25bp yield compression for prime shopping centre assets. Meanwhile, the All Property average transaction yield hardened by a notable 31bps during Q4 to 6.31%, driven by a sharp 50bps inward movement in the office sector.

Ezra Nahome, CEO of Lambert Smith Hampton, commented:

“While Q4’s record-breaking volume is a one-off and unlikely to be repeated any time soon, I still expect 2026 to deliver a tangible improvement upon last year’s total volume of £48bn, up to around £55bn this year.

“Across the market, sentiment is stabilising and confidence is returning, not uniformly, but selectively. Values have found firmer footing and lenders are far more receptive. Capital is more disciplined. Occupiers are making increasingly intentional decisions. The direction of travel is clear: quality, sustainability and long-term relevance.

“Granted, a perpetual state of unease remains on the global stage, with the traditional world order seemingly in a state of flux with Trump at the US helm. But for me, all this plays into the hands of UK property, with its relative security and resilience reflecting a pattern of tight supply, continuing rental growth and value in a global context.

“Alongside a solid outlook for returns, performance seems relatively assured amid the wider uncertainty, leaving me confident that a better year lies in store in 2026”.

Download the latest UKIT Q4 2025 report here in full →