The organisation is convinced that the current market situation means rental rates for offices in London’s most sought-after areas will soar, essentially because demand will far outstrip supply.
An imbalance, brought about by a relative lack of new developments across the city and a wide variety of businesses seeking to increase or improve their office space, is expected to leave renters paying more and more, as long as the situation persists.
Indeed, Knight Frank currently estimates that prime rents in the City of London will increase by up to 9.1 per cent over the course of 2011, with occupiers paying £60 per square foot by the end of the year.
The situation in London’s West End could be even more dramatic, with average office rents tipped to top £100 per square foot at some point this year.
Offering his take on the subject, Tim Robinson, office leasing partner at Knight Frank, said: “This cycle is being driven by a lack of supply and over the next two years, as business expansion appears on the agenda, it is a certainty that the availability of new space will be inadequate to satisfy demand.
Head of London research for the firm, James Roberts, added: “London, with its long-standing ties with locations like Hong Kong and Singapore, is well positioned to become the East’s beachhead for branching into Europe.”
Earlier this week, the communications company committed several hundred million pounds to help Prime Minister David Cameron achieve his aim of turning areas of the East End of London into a Tech City, with some of the top businesses in the sector working out of newly built office space.
Editor’s notes: In 2022, prime office rents were at £72.50 per square foot per year, and prime office rents in the West End were £130 per square foot.
Office leasing activity across the whole of central London slowed down in the last quarter of 2022, and this pattern continued into the first quarter of 2023 due to global economic uncertainties caused by issues with various financial institutions across the globe, high interest rates, the Russo-Ukrainian conflict, supply chain issues and the mass layoffs in the tech and other sectors that commenced in the Summer of 2022.
The total amount of office space in Central London, as of Q1 2023, stood at 21.4 million square feet.
In Q1 2023, there were 10.5 million square feet of new office space in the development pipeline, and there were 8.6 million square feet of active demand in the Central London office market.
In the fourth quarter of 2024, it was reported that prime London office space availability had plummeted to near-record lows.
Vacancy rates for best-in-class office space stood at 0.3 per cent in the core West End market of St James’s and Mayfair, and 0.5 per cent in the City of London.
It was reported in 2026 that there was 11.5 million square feet taken up in Central London in 2025, up 5 per cent on the five-year average but down 9.8 per cent on the ten-year average.
In the City of London in 2025, total office space take-up reached 5.31 million square feet, representing a 0.95 per cent year-on-year increase.
Prime headline rents increased to £91 per square foot by the end of Q4 2025, up by 5 per cent year on year.
The total annual take-up in the West End for 2025 reached 2.55 million square feet, a 10.86 per cent decrease from the previous year.
Prime headline rents in the West End at the end of Q4 2025 increased to £170 per square foot, increasing for the sixth consecutive quarter.