Welcome to your latest Central London office market watch, exploring insight from the City and West End office occupational markets
Contents
Across the Central London market
October saw 404,082 sq ft transact, marking the lowest monthly take-up since January as occupier caution remained heightened in the run-up to the Autumn Budget. The decline in leasing activity this month can largely be attributed to the lack of larger transactions completing, particularly in the City, where, for the first time since January, there were no deals above 25,000 sq ft. However, overall take-up in Central London remains 2% above the five-year average at 6.82m sq ft, despite being down 13% on last year.
While the Insurance & Financial Services sector continues to drive demand, accounting for 27% of YTD take-up, the largest deals in both markets this month were from Serviced Office Providers. In the West End, Runway East acquired the Ground to 2nd floors (25,000 sq ft) at Endeavour House, 189 Shaftesbury Avenue, WC2, marking the operator’s third West End acquisition, and in the City, Orega took the part 5th floor at CityPoint, 2 Ropemaker Street, EC2. Take-up from this sector has steadily recovered from the very low levels recorded during the pandemic, with 433,000 sq ft recorded so far this year, up 5% on the five-year average, though still well below the levels witnessed during the peak of demand in the three years preceding 2020.
Overall supply across Central London dipped slightly to 7.7% at the end of October and is expected to remain broadly stable
Catherine Facer, Director, Central London Agency
Looking ahead, underlying demand remains strong, with under offers and active requirements having steadily risen by 2% this month to 3.0m sq ft and 13.5m sq ft, respectively. Of those added in the last three months, Insurance & Financial Services accounted for roughly a third, although a high number from the Tech & Media sector (30%) were also added, primarily in the 15,000–25,000 and 25,000–50,000 sq ft size bands. Overall, Professional Services makes up the largest share (28%), narrowly ahead of the Insurance & Financial Services sector (27%), supported by continued activity from the Legal and Asset Management sub-sectors.
Overall supply across Central London dipped slightly to 7.7% at the end of October and is expected to remain broadly stable, with just 1m sq ft of speculative development completions scheduled for completion during Q2 2026.
City Highlights
West End Highlights
Changing Face of US Corporate Demand in London
Despite the marked difference in pace of recovery between the UK and US office markets, and the traditionally high concentration of New York-headquartered companies in London, activity from US occupiers seeking space in Central London has remained resilient. A comparison of 15,000 sq ft+ take-up in 2024/25 with the same time period a decade earlier reveals that demand from US-headquartered companies has remained stable as a proportion of take-up, accounting for just over a third. It is worth noting that WeWork was in the midst of a strong acquisition drive during 2015/16, having secured over 700,000 sq ft in Central London in this period alone, representing 19% of total take-up. However, even when excluding Serviced Office Providers from the analysis, take-up from US corporates has only been 1% lower compared to the same period ten years earlier.
While the overall level of take-up has remained largely unchanged from a decade ago, the sources of demand have shifted significantly. Previously, demand was heavily reliant on Tech & Media, namely big tech firms including the likes of Facebook (now Meta), Google and Apple, with the sector accounting for 57% of take-up in 2015/16. In more recent years, however, it has become far more dominated by Insurance & Financial Services, particularly hedge funds, investment management and insurance firms. Space acquired from US-headquartered financial firms has more than tripled over the past ten years to 1.4m sq ft, 64% of which are from companies with a New York headquarters.
Although demand from US big tech has been muted in recent years, London stands to benefit from the significant investment coming from US AI companies. Savills latest European AI report places it at the top of a list of comparable cities in its AI Resilience Index, citing the city’s deep pools of venture capital, favourable regulatory environment and highly-skilled workforce, positioning it as a leading destination for AI growth. Several have already chosen the capital as their European headquarters, and while take-up has been limited so far, as these firms mature, it could lead to an acceleration in leasing activity, as it already has in office markets such as San Francisco. This trend is already evident among domestic AI firms, such as Synthesia, which recently quadrupled its footprint through its acquisition of 20,000 sq ft at Regent’s Place. US companies are set to be the most active in the near term, accounting for almost two-thirds of AI active requirements by number.
In terms of outlook, Financial & Business Services employment growth in London is already expected to outpace comparable cities such as New York and Paris. The prospect of a more relaxed regulatory environment under the Trump administration could provide an additional catalyst for demand from this sector. Rents may also be positively impacted as US-headquartered firms have shown a strong preference for best-in-class space, having pre-let over half the space they acquired since 2024, compared to 34% for all tenants. Furthermore, the average rent paid was 6.2% higher than the overall average.
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