Welcome to your latest Central London office market watch, exploring insight from the City and West End office occupational markets
Across the City market
In the City market, Q3 take-up reached 1.2 million sq ft across 84 deals – a slight slowdown from last quarter despite an increase in the quantity of transactions and largely due to no transactions above 100,000 sq ft completing. The largest transaction was law firm Bristows' c.70,000 sq ft pre-let of floors four to seven of Bow Bells House, a refurbishment that is due for completion early next year, for a rent thought to be in the mid-£80s per sq ft. This brought year-to-date (YTD) take-up to 4.3 million sq ft, up 17% on the five-year average and in line with the ten-year average. With under-offers currently approaching 2 million sq ft – 7% above the long-term average – we expect total take-up for 2025 to exceed both the five- and ten-year averages.
Occupiers have continued to take space in the buildings with the best sustainability credentials, with 67% of take-up coming from EPC A- or B-rated space, up 1% on the previous year and up from 28% five years ago. The Insurance & Finance sector has continued to drive take-up, and, so far this year, has accounted for 35% of space let. This is followed by the Tech & Media sector (13%) and the Professional Services sector (9%).
In the first three quarters of the year, the city has achieved a prime rent of £99.75, up 2% on the same period last year
Catherine Facer, Director, Central London Agency
At the end of Q3, the City vacancy rate fell to 7.4%, down 10 basis points (bps) from last quarter and 150 bps from this point last year. The continued occupier preference for being centrally located is evident in the City Core’s vacancy rate, which remains below average at 6.5%, significantly lower than the long-term average of 7.7%. Lower vacancy rates are particularly prevalent in Grade A towers, where there is only 216,169 sq ft of space available, equating to a vacancy of 2.6%, and falling further to 1.9% when under-offers are included.
Exceptionally low vacancy in Grade A towers has led to a new record rent being achieved in the City market. Law firm Proskauer Rose has expanded within 8 Bishopsgate, EC2, acquiring the 46th floor at a rent of £145.00 per sq ft. With limited availability and strong demand for premium tower space, this record is likely to be surpassed in the near future. In the first three quarters of the year, the city has achieved a prime rent of £99.75, up 2% on the same period last year, a figure we expect to increase with the amount of prime office space currently under offer. We have seen an average Grade A rent of £72.22 per sq ft, up 3% on the same period last year.
City Highlights
Across the West End market
Leasing activity slowed in Q3 to 752,021 sq ft, down 12% on the previous quarter and 37% on the ten-year average. The decrease this quarter can largely be attributed to no transactions above 50,000 sq ft being completed. However, YTD take-up remains down, just 2% on the five-year average and 3% on last year at 2.29 million sq ft, as the total number of deals over 50,000 sq ft YTD remains the highest since 2021. Furthermore, the overall number of transactions increased quarter-on-quarter from 69 to 85, with all size bands below 50,000 sq ft recording an increase.
The largest transaction to complete saw General Atlantic pre-let the fifth and sixth floors (49,601 sq ft) at The Elephant, 318 Oxford Street, W1, marking the second pre-let in this submarket following the pre-let of the final three floors at The M Building, 334 Oxford Street. This, in addition to the lettings at the recently completed Marylebone Place, W1, and 50 George Street, W1, schemes, has resulted in North of Oxford Street West witnessing the third highest levels of YTD take-up we have recorded for this submarket. These transactions highlight both the continued strong demand for high-quality space and for central locations.
By year end, a record amount of 3.74 million sq ft of pipeline schemes are expected to have completed
Catherine Facer, Director, Central London Agency
This demand has been reflected in rental performance, particularly for average prime rents, where there has been growth of 11% year-on-year to £168.26 per sq ft. We have also recorded record rents in Soho, North of Oxford Street East and North of Oxford Street West, and notably, four rents over £200 per sq ft have also been recorded so far this year, equal to the number we have recorded for all previous years combined.
The vacancy rate increased by a further 20 bps this quarter to 8.3%. In contrast to recent rises, however, the increase was not driven by additions from the pipeline but instead by an uptick in the availability of secondary space, with the only scheme added from the pipeline this quarter being SYSTEMS, 43 Brook Green, W6. There was a net increase of 16% in Grade B space being openly marketed, while in contrast, the availability of Grade A space fell for the first time since Q4 2024.
By year end, a record amount of 3.74 million sq ft of pipeline schemes are expected to have completed. However, we expect development completion in 2026 will fall by over a third to 2.47 million sq ft. The Victoria submarket accounts for 40% of the 2026 speculative pipeline, including the remaining space at 105 Victoria Street (335,000 sq ft) and Thirty High, Bressenden Place, SW1 (267,432 sq ft).
West End Highlights
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