The rising demand for high-quality office space by both investors and occupiers alike in the capital has been attributed in part to the relative lack of construction starts in what is undoubtedly the UK’s and one of Europe’s primary business centres.
Reflecting on its own data, the office space investment consultancy Gresham Down Capital Partners has noted that the global economic downturn has not been enough to dent the resilience of the commercial property and office space rental markets in London.
“Five weeks ago, the fear was that there was too much stock on the market, but the appetite of buyers has been voracious,” explained the company’s managing partner, Stephen Down.
Mr Down went on to offer his advice to prospective investors in London office space: “First, stick to the very best in class – that is where the rental growth will provide the performance. Second, work with advisers who have a strong reputation for performance.”
Editor’s notes: Take-up through office lettings deals across central London totalled 10.1 million square feet in 2022. This figure was 18 per cent higher than the previous year’s figure of 8.5 million square feet, although marginally lower than the long-term annual average of 10.3 million square feet.
This indicated a good recovery from the effects of the pandemic.
Demand for high-quality prime office space in London increased following the pandemic as occupiers sought space that attracted employees back to the office following the introduction of flexible working models during and following the pandemic.
Occupiers, particularly in the banking and finance, professional services, and technology, media, and telecom (TMT) sectors, were increasingly seeking best-in-class space with excellent environmental, social, and governance (ESG) credentials.
It was expected that demand from the TMT sector would decline in 2023 following rounds of job cuts at high-tech firms that commenced in the Summer of 2022.
Speculative developments had decreased due to rising costs, inconsistent supplies of building materials, and broader economic uncertainties.
It was anticipated that there would be steady growth in the supply of premium office stock in both the City and West End over the next five years; however, growth expectations had been scaled back in the short term.
Research in May 2026 found that London office space take-up hit 12.1 million square feet across 1,400 deals in 2025, the capital’s strongest year since 2019.
It was also found that the TMT sector had evolved as new and incumbent technology companies embraced artificial intelligence (AI).
Indeed, Avison Young reported that AI and technology firms had accounted for more than a quarter of total central London office lettings take-up in Q1 2026.
Almost 250,000 square feet of office space had been acquired by AI giants Anthropic and OpenAI in the quarter alone.
Take-up totalled 1.9 million square feet in the first quarter, however, which was 23 per cent below the 10-year Q1 average and reflected occupiers’ ongoing cautious sentiment against a backdrop of economic and geopolitical uncertainty, which heightened in the quarter following the US invasion of Iran.
The Central London Grade A vacancy rate fell to just 6.3 per cent in the quarter due to heightened competition for best-in-class space against a backdrop of limited supply, as developers faced increased pressure.