Comprehensive market analysis for occupiers and investors navigating London's evolving office landscape. Prime rents, vacancy dynamics, investment trends, and 8 key market groups.
A composite reading across vacancy, rental momentum, supply pipeline, and occupier leverage — calibrated to Central London's 8 key submarkets.
London's office market completed 2025 with remarkable momentum. Annual take-up of 10.6 million sq ft marked the strongest leasing year in six years, driven by major financial occupiers and the return-to-office mandates that defined the year. The West End (W1/SW1) achieved record rents of £240 psf at Smithson Tower in St James's (SW1), while the City Core (EC2-EC4) saw Savills record prime rents at £105.26 psf, up 6.8% on 2024. Overall market vacancy fell to 7.9%, down 40 basis points quarter-on-quarter — the first decline since Q1 2025.
"The investment market has undergone a striking reset. 2025 saw £9.88 billion traded — nearly 50% more than 2024. Notable transactions include Hayfin's purchase of 70 St Mary Axe (EC3, City Core) for £330m and Royal London's acquisition of 1 Newman Street (W1, West End) for £250m."
For 2026, occupiers face significant cost pressures. Business rates liabilities are set to rise by £432 million from April, with Farringdon (EC1, City Fringe) facing a 38% jump in business rates. Savills forecast 4.6% City Core and 4.3% West End rental growth, while Grade B rents are expected to decline 1.5%. ESG compliance poses a secondary challenge: 27% of office stock currently lacks EPC certification, and buildings must reach EPC C by 2027, with EPC B mandated by 2030 — or face unlettability.
London's office take-up across all sectors totalled 10.6 million square feet in 2025. Financial services occupiers drove 31% of annual volume, while professional services accounted for 30%. Tech and media rounded out the top three at 14–18%, reflecting the city's enduring appeal to multinational and fintech firms seeking agglomeration benefits and talent pools in prime locations.
"Q4 2025 saw take-up of 2.88m sq ft, 17% above the annual average and driven by year-end financial commitments."
Major occupier announcements reflect a bifurcated market: mega-deals in East London (JPMorgan, HSBC, Visa each committing 200k+ sq ft to Canary Wharf) and City Core (Squarepoint Capital's 400k sq ft pre-let at 65 Gresham Street, EC2) sit alongside flight-to-quality patterns. New, refurbished, and BREEAM-certified space accounts for 77% and 64% of take-up respectively. Older, non-compliant secondary stock struggles to compete.
Vacancy varies dramatically across London's eight sub-markets. Prime Central London sub-markets (West End, City Core) maintain tight supply, while secondary and outer-London areas face pressure. Overall vacancy sits at 7.9%, but City Core stands at just 7.0% and West End below 2%, reflecting strong demand from blue-chip occupiers. Conversely, Hammersmith (W6) and parts of outer West London face vacancy above 26%, and Vauxhall/Battersea (SW8) sits at 18.1%.
New-build vacancy is exceptionally low at 1.2%, underscoring the flight-to-quality trend. Older stock — much of it pre-BREEAM, lacking modern amenities, or energy-inefficient — struggles. Buildings failing to meet EPC C standards by 2027 (and EPC B by 2030) face regulatory de facto unlettability, pushing landlords toward retrofitting or conversion schemes.
Prime Grade A rents exhibit a stark hierarchy across London's eight sub-markets. West End (W1/SW1) dominates, with top-of-market achievements at £240 psf (Smithson Tower, St James's). City Core averages £105–£145 psf (record £145 at 8 Bishopsgate, EC2). Midtown (WC1/WC2) is forecast for the strongest growth at 20.6% over five years, despite current prime rents of £85–£95 psf. City Fringe, East London, and outer West London remain value markets, with rents between £50–£100 psf depending on micro-location and specifications.
"Savills forecast City Core rents to grow 4.6% annually, and West End 4.3%, while Grade B faces a structural headwind of –1.5% annually due to flight to quality and ESG compliance costs."
Business rates present an acute near-term shock. From April 2026, London office portfolios face a £432 million aggregate increase in business rates liability. Farringdon (EC1) experiences a particularly acute 38% jump — a critical burden for occupiers seeking affordability in the City Fringe. Rising ESG compliance costs and rent pressures combine to tighten occupier margins significantly, especially for cost-sensitive sectors and smaller firms.
London's development pipeline stands at 13.48 million square feet under construction. Notably, 37% is already pre-let, indicating strong demand fundamentals and confidence from developers. Two-thirds of the pipeline comprises refurbishment rather than new-build, reflecting the city's existing building stock and the economics of retrofit versus demolition.
Expected 2026 completions total approximately 2.47 million square feet, with 70% pre-let. Key completions include:
This robust pipeline reinforces London's competitiveness and ensures supply to meet demand, though pre-let rates indicate developers are cautious about speculative delivery. The concentration of completions in City Core underscores continued institutional confidence in the East London and Central London finance hubs.
2025 saw landmark occupier commitments, particularly from financial services and tech occupiers. The following table summarises the major transactions shaping the market:
"Mega-deals in East London demonstrate the Elizabeth Line effect. JPMorgan, HSBC, and Visa's combined 600k+ sq ft commitment signals confidence in accessibility, connectivity, and long-term value."
These transactions underscore several market trends: (1) flight to quality — all headline deals involve Grade A or refurbished space; (2) East London momentum — Canary Wharf's Elizabeth Line access and institutional anchors drive mega-commitments; (3) South of the River emergence — SE1 deals (LEGO, ServiceNow, Southbank schemes) reflect the Thames's southern embankment transformation; and (4) City Core resilience — Squarepoint and Gibson Dunn pre-lets confirm continued financial-sector demand in EC2–EC4.
Making Moves' proprietary market taxonomy divides London into eight distinct sub-markets, each with unique supply, demand, rent, and vacancy profiles. This granular approach helps occupiers identify precisely where to locate.
Postcodes: W1, SW1, WC2. Mayfair, St James's, Covent Garden, Victoria.
London's most expensive market. Savills reports average prime at £166.61 psf (+6.1% YoY). Record £240 psf at Smithson Tower, St James's (SW1). Vacancy below 2%. Supply: 0.7 years in Mayfair, 1.4 years in St James's (C&W). Demand from law, finance, asset management, and HQ functions drives premiums. Undersupply of modern Grade A creates landlord-dominated dynamics.
Landlord's MarketTrend: ↑
Postcodes: EC2, EC3, EC4. Liverpool Street, Lloyds, St Paul's, Bank.
Most active submarket, 59% of 2025 take-up. Savills prime at £105.26 psf (+6.8%). Record £145 psf at 8 Bishopsgate (EC2). City Core has just 1.1 years of Grade A supply left (C&W). 30 major schemes under construction. Financial institutions anchor demand; tech occupiers increasingly present. Major completions (One Exchange, One Liverpool Street, Adelaide House) drive modern supply. Landlord dynamics.
59% of Take-UpTrend: ↑
Postcodes: EC1, EC2/E1, E1. Clerkenwell, Farringdon, Shoreditch, Old Street.
Clerkenwell/Farringdon (EC1) and Shoreditch/Old Street (EC2/E1) best-in-class at £90–£100 psf. Standard space £45–£55 psf (SHB). Farringdon facing 38% business rates jump from April 2026 — critical challenge. Elizabeth Line (opening autumn 2024) major catalyst for connectivity. Angel Square (185k sq ft) recently delivered. Creative tech sector, legal, and professional services anchor. Affordability relative to City Core attracts growing occupier interest despite near-term rate headwinds.
Elizabeth Line CatalystTrend: ↑
Postcodes: WC1, WC2. Bloomsbury, Chancery Lane, Holborn.
Knight Frank reports prime at £85 psf. Forecast 20.6% rental growth over next 5 years — strongest growth outlook in London. Bloomsbury and Chancery Lane anchor legal and professional services. Occupier demand reflects relative affordability versus West End, superior connectivity (Elizabeth Line, Northern, Central lines), and emerging life sciences/innovation ecosystem (UCL, Wellcome Trust proximity). Vacancy ~5.8%. Strong growth momentum.
Strongest Growth ForecastTrend: ↑
Postcodes: E14, E20, E2, E8. Canary Wharf, Stratford, Bethnal Green, Hackney.
Canary Wharf (E14) Grade A £50–£75 (SHB/CBRE). Take-up exceeded 1.1m sq ft (+62% vs 10-year average). JPMorgan, HSBC (~200k each), Visa (300k+) mega-deals anchor financial and tech demand. Elizabeth Line major catalyst for transport accessibility and future growth. Stratford (E20) emerging as secondary hub. Modern amenities, waterside settings, and institutional occupier commitments drive rents upward. 2026 should see continued growth from pipeline delivery and mega-deals materialising.
Mega-Deal MomentumTrend: ↑
Postcodes: N1, NW1, NC1. Islington, Camden, King's Cross.
King's Cross (NC1) commands premium within group — £100+ psf Grade A — due to world-class master-plan delivery, mixed-use vibrancy, and institutional anchors. Islington (N1) and Camden (NW1) offer more value (£65–£85 psf) whilst maintaining creative/tech appeal. Strong demand from tech, media, advertising, and design sectors. King's Cross transformation drive northwards expansion toward Euston. Vacancy steady. Growth potential supported by East Coast Main Line connectivity and pipeline delivery.
King's Cross PremiumTrend: ↑
Postcodes: SE1, SW8. London Bridge, Waterloo, Southwark, Vauxhall, Battersea.
London Bridge/Waterloo/Southwark (SE1) Grade A £70–£115 (SHB/Knight Frank). SE1 take-up surged 45% vs 2024. LEGO 191,894 sq ft at 76 Southbank (SE1). ~500k sq ft new space due by end 2026. Premium rents reflect Thames-side amenity, cultural density, and Northern Line access. Vauxhall/Battersea (SW8) vacancy at 18.1% — secondary market facing headwinds but potential for affordable growth. SE1 continues to be London's fastest-growing premium sub-market.
SE1: 45% GrowthTrend: ↑
Postcodes: SW3–SW7, W2, W11, W12, W6, W4. Kensington, Knightsbridge, Paddington, Notting Hill, Hammersmith, Chiswick.
Hugely diverse sub-market. Kensington/Knightsbridge (SW3/SW7) premium end (£85–£95 psf). Paddington (W2) benefiting from Elizabeth Line connectivity. But outer West London significantly softer: Hammersmith (W6) vacancy at 26.4%, Chiswick (W4) around 20%. Limited modern supply and dispersed occupier demand create bifurcated dynamics — prime Paddington/Notting Hill gains while Hammersmith/Chiswick struggle with secondary stock and spatial sprawl. White City (W12) emerging as tech cluster around BBC/Sky/EMI legacy anchors.
Mixed: Premium to FringeTrend: →
London's office investment market achieved £9.5–£9.88 billion in 2025, representing a striking 48–52% increase on 2024. This recovery reflects capital return to UK real estate, an improved interest rate outlook, and confidence in London's structural appeal. Q4 2025 alone saw £3.25–£3.67 billion transact, indicating accelerating momentum into 2026.
"Major institutional transactions include Hayfin's acquisition of 70 St Mary Axe (EC3, City Core) for £330m, Royal London's purchase of 1 Newman Street (W1, West End) for £250m, and Brookfield's continued City Core holdings."
Investor preferences remain firmly tilted toward Grade A, modern, and BREEAM-certified assets. Weighted average yields have compressed to 4.5–5.0% in prime central locations (West End, City Core), while secondary and outer-London stock trades at higher yields (6.5–7.5%) reflecting higher perceived risk and occupier demand uncertainty.
ESG compliance costs, business rates exposure, and rent growth expectations shape acquisition strategy. Investors increasingly view retrofitting, refurbishment, and conversion (to residential or mixed-use) as value-add levers. Prime London office remains attractive relative to global capitals, underpinned by transparent regulation, deep capital markets, and London's role as a global financial centre.
2026 Outlook: Knight Frank forecasts £12 billion investment volume in 2026, supported by continued capital migration from Asia-Pacific and US markets. Institutional investors seeking inflation-protected income and long-dated lease structures will favour Grade A City Core and West End assets with strong covenant tenants.
Beyond headline metrics, four structural themes will define London's office market evolution over the next 18 months:
From April 2026, London office portfolios face £432 million in aggregate business rates increases. Farringdon's 38% increase, multi-million pound liability swings for major City Core occupiers, and smaller firms' margin compression will weigh on leasing sentiment. Landlords may absorb portion of increases via rent-free or reduced rent deals. Occupiers will seek stability clauses and certainty in long-term commitments. Outdoor survival depends on negotiating power; Grade B and secondary stock faces particular risk.
EPC C compliance by 2027 and EPC B by 2030 create a two-phase retrofit imperative. 27% of London office stock currently lacks EPC certification; 70% of uncertified stock may face de facto unlettability if compliance deadlines are missed. Retrofit capex runs £400–£600 per sq ft for serious interventions. Landlords must decide: retrofit and absorb costs, convert to residential, or sell. Occupiers will increasingly demand certified assets, reducing secondary stock supply and pushing rents upward for compliant buildings. ESG will create a 'haves vs have-nots' market bifurcation.
Amazon, Lloyds, Instagram, and others have mandated full return-to-office (RTO). Blackfriars saw +139% footfall spike post-mandate announcement. 62% of CEOs aim for full RTO by 2027. Yet 58% of surveyed workers say they'd quit if forced to full-time office attendance. The resulting tension will shape leasing: occupiers adopt hybrid (3–4 days/week) as the pragmatic compromise, reducing headcount per building yet maintaining premium location and experience. This stabilises overall take-up but limits rental growth and may depress secondary/outer-London space particularly.
London's office market is increasingly divided: (A) Prime Central London (West End EC2–EC4, South Bank) — Grade A, modern, ESG-certified, institutional tenants — remains supply-constrained, rent-positive, and landlord-favoured; (B) Secondary, outer-London, and non-compliant stock — lacking modern amenities, below-par EPC ratings, limited institutional interest — faces headwinds with rising vacancy, rent compression, and conversion pressures. The bifurcation will accelerate, eroding the "middle market" (mid-range Grade B). Investors and occupiers must pick a side: premium prime or conversion/redevelopment. Grey zones offer diminishing returns.
2026 Forecast Summary:
This report synthesises market intelligence from leading real estate research firms, investment advisors, and transaction data. All statistics and forecasts are attributed to their sources:
Data Currency: All market data, transaction records, and forecasts in this report reflect information current as of Q1 2026. Real estate markets evolve rapidly; stakeholders should cross-reference primary sources for the most recent updates.
Making Moves London is a specialist commercial real estate advisory firm focused exclusively on London's office market. Founded in 2012, Making Moves has built a proprietary database of market rents, occupier movements, investment flows, and sub-market dynamics spanning all eight London market groups.
Our Q1 2026 Market Rent Guide categorises London into eight distinct postal-code-based groups (West End, City Core, City Fringe, Midtown, East London, North London, South of the River, West London), each with bespoke demand, supply, rent, and vacancy trends. We work with occupiers, landlords, investors, and lenders to navigate London's complex and evolving office landscape.
Services: Market analysis, occupier advisory, landlord representation, investment due diligence, sub-market benchmarking, and strategic leasing strategy.
Contact: makingmoveslondon.co.uk