The UK and parts of the US commercial real estate sector seems to be experiencing a tough time. We talk to a firm with a family heritage going back more than a century about where it sees opportunities.

When the news headlines relate dramas about New York fights over rent controls, a bounce-back of London’s Canary Wharf district or worries about UK tax hikes, it makes property investing seem daunting.

The whipsawing fortunes of property in the commercial space were highlighted this week when Bloomberg (24 November) noted that the number of visitors travelling to the east London financial district of Canary Wharf by rail and tube has surpassed pre-pandemic levels. More bankers are commuting to their offices, suggesting that the much-vaunted death of the office worker is exaggerated. (Your writer can testify that the Jubilee Line to the Wharf does seem busy these days.) 

In July, BNP Paribas Real Estate said in its second-quarter London Office Market Update that the overall vacancy rate across central London fell to 8.3 per cent, down from 8.9 per cent in Q1 2025. That figure was still 146 basis points above the same point last year but well below the five-year quarterly average of 9.9 per cent. “The improvement is largely attributed to steady leasing activity, robust demand for high-quality offices, and a moderation in the delivery of new space,” the report said. 

Such stories suggest that areas considered to be in trouble can recover.

Mactaggart Family & Partners, aka MF&P, a family office-backed property development and investment manager, sees diamonds in UK commercial real estate where others might have seen only dross. It wants to own properties that can quickly capture the upside.

“We believe in the UK and that the office sector is massively undervalued as an asset class,” William Laxton, CEO at the firm, told WealthBriefing in a recent meeting near his offices in the St James’s area of London. “There is a lot of potential for growth in the UK and now is an extremely sensible time to re-enter the real estate market,” he said.    

Such optimism is a tonic when the UK wealth management sector anxiously awaits what UK finance minister Rachel Reeves intends to do in plugging a public sector financial “black hole” of up to £40 billion ($52.6 billion). Tax rises are expected, with higher value properties in the firing line.

MF&P is an organisation with a history stretching back 125 years – with a kind of institutional “memory” that perhaps counters temptations to worry about immediate events. Its total property assets are $3.5 billion, and it holds a mix of assets in the US and UK. There are properties in the US, such as retail, offices and multi-family assets in New York City. It is also building condominiums in West Palm Beach, Florida. MF&P has a significant UK commercial real estate portfolio, composed of offices, hotels, self-storage assets and some strategic land. 

The most recent investment that MF&P has made is a 200,000 sq ft office regeneration of former Lloyds Banking Group HQ in Bristol’s Canons Wharf development. The firm has also received planning permission for a new 128-bedroom hotel next to the Smithfield Market regeneration area, in London's Farringdon district.

Laxton said MF&P looks at long-term mega trends, such as how people are spending their money, whether this is different between the generations and how tech and AI drive the relevance of certain types of assets (logistics and data centres being obvious examples). One key trend that the business is harnessing is the desire for people to have authentic experiences, with travel and hospitality being at the centre of that. 

“Real estate is an implicit part of that experience but can be explicit when done well,” Laxton said. 

One trend is highlighted by Mactaggart’s “Resident Hotels” strategy. These hotels are almost entirely focused on rooms and the guest experience, proactively avoiding operating bars, restaurants, gyms, spas, pools and conferences. Recent examples are The Resident Covent Garden, Bedford Street in London and The Resident Edinburgh. Almost all (99 per cent) of the revenue in these hotels comes from the rooms, with little in the way of amenity offered. 

Laxton said these hotels are popular – “guests adore them” – and results are encouraging. The hotels produce EBITDA (earnings before interest, taxation, depreciation and amortisation) of 50 per cent of revenue and “this is a very deliberate strategy.” 

“We make a very high EBITDA on a per-site basis and very happy guests. Our hotels aren’t cheap, but they are exceptional value,” Laxton said. 

On the other side of the Pond, a business such as MF&P has had to contemplate a new mayor of New York City, Zohran Mamdani, an unashamed socialist and advocate of rent control – which on standard economics textbooks is a recipe for decaying landlord property.

Laxton, who was asked about the situation by WealthBriefing, said “most of it [rent control] is already priced in” to the real estate capital markets, but it’s clearly not good for the asset class.

“We have been building in Florida because we were and still are worried about New York,” he said. “The tax base in New York is very high, and people are moving to Florida; we see our Florida exposure as ballast to our New York exposure.”

Recent years have not been easy for the business in New York. A few years ago, MF&P was a borrower from the now-defunct Signature Bank in its multifamily residential strategy. “All of a sudden a key driver of returns – well priced and widely available debt funding – was significantly impeded...Things have become more and more challenging with softening yields, rent control laws and increasing voids; the asset class is in a tough place,” Laxton said.

To manage such a position requires experience.

Laxton, besides his CEO role for MF&P, is managing director of the Western Heritable Family Office and PropCo, and director of Resident Hotels. He has nearly a decade of leadership experience, driving strategies in office repositioning, hotel development, and self-storage, while raising more than £100 million in third-party equity since 2020. His work in the property area gives him a line of communication to the Bank of England – he contributes to the central bank’s Decision Maker Panel.

He is keen to drive MF&P forward. Mactaggart Family & Partners traces its origins to Western Heritable, founded in 1896 by Sir John Mactaggart in Glasgow. Initially, the company developed and managed residential properties in Glasgow; later it expanded to London, building substantial blocks in areas such as Fulham, St John’s Wood, and Mayfair. From the mid-1970s onward, it grew into an investment platform with assets in both the UK and the US, including commercial properties in London and New York. 

Name above the door
More than 20 families invest alongside Mactaggart. “We always make sure we are the largest investor in a transaction and we invest on the same terms as everyone else,” Laxton said. 

“We put our name above the door. Our ambition is that we become synonymous in the UK real estate world as ‘the family that does it’,” he continued. 

MF&P does not raise funds, preferring to invite investment directly into each transaction, allowing investors the opportunity to decline based on their own preferences, rather than have capital called under a long-standing fund commitment.