Investors sank money in big European office deals again last year, with values and the number of transactions rebounding as the prospect of a supply crunch breathed new life into a once moribund sector.

A total of 21 transactions worth £100mn or more had completed in central London as of mid-December, compared with 12 for all of 2024. Nine office buildings were sold for £200mn or more, compared with just one in 2024.

Big deals accounted for a greater share of the market. Office building sales in central London worth £100mn or more were 53 per cent of total sales volumes as of mid December, up from 27 per cent for the whole of 2024, according to data from real estate broker Savills.

“Investors are feeling more confident” about putting money back into this space, particularly domestic funds and institutions, said Oliver Bamber, director for central London investment at Savills. Bamber is advising on the sale of St Christopher’s Place, a mixed-use office, residential and leisure estate, and Stirling Square, an office building. Both are in the West End and expected to sell for more than £200mn.

As of mid-December, there were 12 office deals worth £100mn or more under way in continental Europe and the UK, with a total value of €2.7bn. That compares with nine deals worth €1.87bn at the same point in 2024, according to data from MSCI, and eight worth €1.65bn in 2023.

“Despite the noise around work from home, actually the cranes have stopped for a number of years in key markets, presenting in critical markets like London a supply crunch,” said Nick Deacon, head of offices for Europe at Nuveen Real Estate.

“Demand has stayed up, supply is looking really difficult, we’re all anticipating rental growth and that’s fundamentally what people are buying into,” he added.

Nuveen in December sold its “Can of Ham” skyscraper in London to Hayfin and Capreon for about £340mn. The average office deal size in Europe is about €35mn, according to MSCI.

US asset manager Invesco has appointed broker CBRE to sell its Capital 8 complex in Paris’s 8th arrondissement, which could fetch about €900mn, according to people familiar with the matter.

Invesco acquired the nearly 500,000 sq ft building in 2018 and spent two years and €100mn redeveloping it. It now has a rooftop bar and a “hotel-inspired lobby”, according to the firm. Invesco and CBRE declined to comment.

A price tag of €900mn would represent the largest European office building sale in three years and the largest in France in five years. It joins other high-end assets that are being sold, a sign the market is creeping back after valuations crashed in the wake of the pandemic and high interest rates.

JPMorgan Asset Management and Singapore sovereign-wealth fund GIC, for example, are selling OpernTurm, an office tower in Frankfurt known for its good location and steady tenant base. It could fetch €800mn, according to people familiar with the transaction. JPMorgan and GIC declined to comment.

Both real estate investment manager Hines and developer Art-Invest Real Estate have looked at OpernTurm, according to people familiar with the matter. They declined to comment.

Meanwhile, Blackstone in September snapped up the Centre d’Affaires Paris Trocadéro, a mixed-use property including office and retail in the 16th arrondissement, for about €700mn.

“There’s real evidence of rental growth: we are seeing some prime rents in the City of London can be well north of £100 a foot, north of €1,200 a metre in Paris,” said Samir Amichi, Blackstone’s head of real estate acquisitions for Europe. “These are rents we hadn’t seen before.”

The Trocadéro sale is a “bellwether” for supersize deals, said Tom Leahy, head of real estate research for Emea at MSCI. “It’s emblematic of a broader recovery.”

Still, investors remain selective, with bidders focused on well-located buildings with attractive amenities in the top global cities.

Lars Huber, head of Europe at Hines, said capital completely dried up over the previous two or three years and has only started coming back recently.

“Investors are drawn to Europe right now because the interest rate environment has improved, construction costs are moderating, there’s less supply of top-quality office space and Europe provides geopolitical stability compared to other places.”

Traditional lenders are also more keen to lend, which is adding liquidity, he said.

In the first half of 2025, new commercial real estate lending in the UK totalled £22.3bn, up 33 per cent from the year before, according to research from Bayes Business School.

For the Trocadéro transaction, Blackstone’s loan-to-value ratio was 60 per cent, said a person familiar with the matter. A year and a half ago, it would have been hard to get leverage above 50 per cent LTV, the person said.