Capita Symonds, a consultancy firm, has released data which shows London has not had such a need for office space since the 1980s.
By 2012, it is possible that office space in the West End could go for as much as £100 per square foot, compared with £70 today, the research found.
“Those who took the plunge and invested in the central London office market over the last 18 months have good cause to celebrate”, said James Gillett, a director of Capita Symonds.
“Two years ago this situation would have been unthinkable”, he added.
It is because of a lack of new commercial space developments lately that this situation has arisen, the report elaborated.
In the first three months of this year, only 12 projects exceeding 20,000 square feet were initiated. One year ago there were 39 such deals.
Gillett continued: “Companies were in a great position [two years ago] with a surplus of good space resulting in aggressive financial offers from landlords desperate not to lose tenants. For businesses looking to move, those days have passed – the boot is firmly on the other foot.
“Consequently, occupiers need to consider their options very carefully. Some may be tempted to seek lease extensions for the next two to three years in the hope that supply line will improve.”
Recently, Hong Kong assumed the mantle of the city with the world’s most expensive office space, a title formerly held by London. Office rents in Hong Kong have almost doubled in the past five years.
Editor’s notes: Office rents in London did indeed increase, and in 2022, rent for prime office space in the West End reached £130 per square foot per year.
Whilst circumstances in June 2023 were quite different from when this article was originally published, there was a slowdown in construction project starts.
The reasons include increased construction costs due to supply chain disruptions partly caused by the Russo-Ukrainian War, as well as higher financing costs due to high interest rates.
These factors slowed leasing activity in the short term; however, demand was expected to push rents up as activity increased, particularly for best-in-class space, as businesses were increasingly opting for space that is enticing to employees and has ESG credentials.
However, as of June 2023, there was 3.2 million square feet of office space under construction speculatively in the West End, scheduled for completion in 2023.
In 2026, the flight to quality in the London office market continued, as it did in all other major office markets.
This, combined with continued pressures on developers from the ongoing conflict between Russia and Ukraine, instability in the Middle East, and other factors, created sustained upward pressure on office rents.
The demand for best-in-class space also continued to grow as occupiers sought amenity-rich, environmentally friendly space with high levels of environmental, social, and governance (ESG) credentials.
The Financial Times reported in June 2026 that prime office rents in the City of London had risen to £130.80 per square foot at the beginning of 2026, compared with £165 per square foot for prime West End office space