P10 Financial Blog

2025 Director’s Cut: Capital Markets & Commercial Property Finance

Written by James McGregor | Feb 1, 2026 4:26:26 PM

Was 2025 Really a Flop?

The narrative last year was a bit grim, in all honesty. And that’s a big problem for the UK.

My personal mantra is simple: what you speak and believe will become your reality. So witnessing the amount of crying on social media last year got a bit painful.

 

When I look at the broader picture in the UK, the underlying numbers from 2025 weren’t too bad at all.

  • Base rate dropped to 3.75% - bosh, that’s a big win for the CRE and residential property markets.
  • Inflation cooled to 3.2% for the year to November 2025 - lovely stuff, things are getting better.
  • House sales increased to 1.2 million transactions, up 9% from 2024.
  • The FTSE finished the year 20% up year-on-year.
  • The UK is forecast to be 3rd in the G7 for growth in 2026.

Yes, unemployment data was grim and will probably continue to get worse. This will be driven by a few things: the adoption of AI, the cost of low-skilled labour these days, and the fact that there are a lot of businesses that simply won’t be able to continue trading.

But if you get away from social media, avoid a lot of the right-leaning media, and actually take a look at the hard data - and your own personal situation - you may come away with a more positive feeling going into 2026.

If you do want to focus on the negatives, feel free. But I promise you, it won’t take you very far.

A Quick Word on P10

At P10, we had a solid year. A few key numbers:

  • Group revenue up 47%
  • Group costs down by 15.85%
  • Headcount reduced by 2

Why am I sharing this? Because it’s important that we walk the walk for our accountancy clients. We work with them every day to help deliver growth, and I believe it matters that they know we’re on the same journey.

One of the biggest things we measure in our business is the growth of the businesses we look after. Why? Because if our clients are growing, it means we’re playing a positive role in their journey. It’s very difficult to grow without the correct finance functions in place.

Last year, our portfolio of businesses delivered 31% year-on-year growth. That’s a massive credit to our clients and the work they’re putting in within what has been a difficult market.

2025 Market Activity: What Stood Out

There was a lot of big news in the financial markets in 2025, particularly around M&A activity. A few notable transactions stood out:

  • Arc & Co acquired by FRP Advisory
    We’re seeing a major push for firms to offer services across the financial spectrum, and this acquisition is another clear example.
  • Allica acquires Kriya
    This enables Allica to offer embedded finance to its existing SME client base and opens another channel to expand its lending book.
  • Monzo acquires Habito
    Habito’s digital mortgage platform will be integrated directly into the Monzo app, linking into its Homeownership feature. This is an interesting move from a bank stepping further into advisory services.
  • Shawbrook floats on the LSE at a £1.92bn market cap
    This looks like a strong strategic move, giving the bank access to cheaper capital and the ability to expand its lending offering with more competitive pricing.

2026 Predictions

  • BOE base rate to fall to 3% by the end of 2026. I’ve always believed this is where long-term rates should settle.
  • Inflation to hit the 2% target by September, barring another war or major global conflict.
  • Some form of Help to Buy-style scheme introduced for developers. Quite simply, not enough homes are being built.
  • The CRE office sector to continue its run from London into more regional areas.
  • 20% more transactions across both residential property and CRE markets by the end of 2026 as interest rates fall and deals become more liquid.
  • Increased M&A activity in professional services as cheaper money drives more consolidation.

Commercial Property Finance: The Return of the Office

The standout story within CRE in 2025 has to be the return of the office.

We’ve believed for some time there has been a significant opportunity in office space, but 2025 marked the return of institutional backing for this asset class. We expect that to continue into 2026.

We’re currently seeing a huge appetite from lenders to get capital out the door. As interest rates fall and profits on deposits start to decline, lenders open up criteria, increase leverage, and become far more favourable on margins.

Top London Office Deals in 2025

  1. Visa - Canary Wharf, 15-year HQ lease (~300,000 sq ft)
    Major occupational lease
    Visa signed a long-term lease at One Canada Square, relocating its European headquarters later in the decade.
  2. 100 New Bridge Street - £333m sale (City)
    Investment sale / forward commitment
    Acquired by State Street, marking one of the largest single-asset office investment transactions in the City this year.
  3. Canary Wharf leasing activity - ~250,000 sq ft
    Multiple leasing deals aggregated
    Canary Wharf Group reported around 250,000 sq ft of new office leases.
  4. Squarepoint pre-let - 65 Gresham Street (City)
    Pre-let agreement
    Squarepoint pre-let circa 400,000 sq ft at 65 Gresham Street.

Capital Deal of the Year

We acted as debt advisor on the acquisition of a 95,000 sq ft office building in Reading, delivered by Jack Grey.

  • Borrowing: £9.8m
  • Size: 95,000 sq ft
  • Pricing: 3-year fixed at 6.94%
  • Leverage: 70% LTV (83% of vacant possession value)
  • Structure: Two separate loans creating a part-amortised, part-interest-only profile
  • Return on equity: 22%

This was an impressive deal structured by our client, backed by a personalised borrowing solution delivered by one of our banking partners.

The asset management strategy targets upgrades across the building, increased occupancy, and a 33% uplift in rent roll. If delivered successfully, this could increase the asset value by 283% within the three-year fixed period, assuming a conservative 8% yield.

Final Thoughts

2025 wasn’t perfect - but it wasn’t the disaster it was often made out to be either.

If you strip away the noise and focus on the data, there are clear signs of stability returning and opportunity opening up across capital, property and professional services. As liquidity improves and confidence builds, the businesses that are best structured - financially and operationally - will be the ones best placed to take advantage.

At P10, our focus remains the same: helping clients make well-informed decisions, structure deals properly, and grow in a sustainable way, whatever the market conditions.

If you’d like to discuss any of the themes above - whether that’s capital structuring, CRE opportunities, or what 2026 might look like for your business - I’m always happy to have a conversation.