Office Rent in London: A Market Guide for 2026

London Office Rent Market Overview

The cost of London office rent is a major factor for businesses, with prices differing greatly depending on the location and quality of the building. In high-end areas like St. James’s and Mayfair, top-quality (Grade A) offices can now command rents exceeding £240 per square foot for the most prestigious buildings, with prime rents typically ranging from £150-£200 per square foot. In comparison, Grade B offices in less central areas are usually more affordable, generally between £70 and £103 per square foot. Notably, the highest recorded office rent in the UK (and possibly one of the highest in the world) was at Mercury’s 30 Berkeley Square in Mayfair, reaching £277.50 per square foot for a 2,700 sq ft office, though recent deals are approaching these historic levels.

Latest Market Figures

The London office market has shown significant resilience throughout 2025, with conditions improving markedly from earlier challenges. By Q3 2025, overall office vacancy rates had stabilised at 7.7-7.8%, a substantial improvement from the 10.7% peak recorded in early 2025. This recovery reflects sustained demand for high-quality office space, with approximately 14.16 million sq ft of space under construction, of which 35% is already pre-let.

The market’s strength is evident in both leasing and investment activity. In Q3 2025, 1.95 million sq ft of office space was leased, with Grade A deals accounting for an impressive 70% of the total, significantly above the 59% ten-year average. This “flight to quality” intensified throughout 2025, with occupiers showing a clear preference for modern, sustainable buildings. In the City, record rents of £145 per square foot were achieved at 8 Bishopsgate, whilst prime West End buildings commanded up to £240 per square foot, showing the substantial premium for best-in-class space.

Investment activity has also rebounded strongly, with full-year 2025 volumes reaching £6.43 billion, surpassing 2024 totals and signalling renewed confidence in London’s office market. Prime yields have stabilised at around 5.50% in the City and 3.75% in the West End, reflecting improved market sentiment.

How does this affect renting an office in London?

If you’re planning to rent an office in London, current market conditions highlight the critical importance of early planning and decisive action. The supply of premium, centrally located Grade A space remains extremely tight, with vacancy rates as low as 2.6% for prime City towers and 3.6% in the West End Core (Mayfair/St James’s). This scarcity means competition for the best buildings is intense, and occupiers are increasingly committing to space years ahead of lease expiry.

We recommend starting your search and lease negotiations 12 to 18 months before your planned move, and engaging with a fit-out company early to ensure your new office meets your operational needs and brand identity. For larger requirements (over 100,000 sq ft), lead times are even longer, with many occupiers now securing space up to four years in advance.

Supply Outlook and Future Trends

Looking ahead to 2026 and beyond, the development pipeline is set to constrain significantly, which will support continued rental growth in prime locations. By year-end 2025, there was a record 3.74 million sq ft of pipeline schemes. However, development completions in 2026 are forecast to fall by over a third to just 2.47 million sq ft, with the construction pipeline after 2026 described by market analysts as “extremely thin.”

Current Central London availability stands at approximately 27.79 million sq ft, but this figure masks a stark divide between Grade A and Grade B space. While overall vacancy has stabilised, prime Grade A availability in core locations remains at critically low levels, creating a two-speed market where modern, sustainable buildings lease rapidly whilst older secondary stock struggles to attract tenants.

For businesses looking to rent office space, this supply shortage presents both challenges and opportunities. While competition for premium space will remain fierce throughout 2026-2027, those willing to consider emerging submarkets or buildings undergoing ESG-focused refurbishment may find better value. Whether you’re planning to expand, relocate, or carry out an office fit-out, understanding these supply constraints is essential for making informed decisions about timing, location, and budgeting. For a visual overview, check out our map of office rent in London.

Contents

1. Prime Rent in London
2. City of London & Southbank Office Rent
3. West End & West London Office Rent
4. Mid Town Office Rent
5. London’s Tech Belt
6. East London Office Rent
7. Grade A and Grade B Rent
8. From Prime Rents to Super Prime Rents
9. Key Trends and Shifts in London’s Office Landscape
10. FAQs and Related Questions on London Office Rent

Prime Rent in London

Despite broader economic shifts and a stabilisation of interest rates throughout 2025, prime rental rates across London remain exceptionally resilient. A chronic shortage of best-in-class, ESG-compliant office spaces has driven prime rents to record highs in key submarkets entering 2026:

• West End: The premium sector continues to lead the capital, with prime rents in Mayfair and St. James’s now reaching an impressive £185 – £200 per sq ft. This shows acute scarcity of “Super Prime” assets and an appetite among high-value occupiers in the finance and luxury sectors for the highest environmental credentials.
• City Core: In the heart of the capital, prime rents have seen a significant uplift, settling at around £97.50 – £100 per sq ft. This level shows the steady demand for “Grade A+” space as firms consolidate into smaller, higher-quality footprints.
• Emerging Submarkets: Areas such as Farringdon and Midtown have shown remarkable strength, achieving prime rental levels of roughly £105 per sq ft and £90 per sq ft respectively. These figures highlight the “Elizabeth Line effect,” with tenants focusing on securing high-specification assets with superior connectivity.

While overall leasing volumes showed a more balanced pace in Q4 2025, under-offers across Central London remain healthy, totaling approximately 3.2 million sq ft. Large transactions (those over 50,000 sq ft) have become increasingly focused on pre-letting buildings still under construction to secure supply for 2027 and 2028. Investment activity further supports this, with 2025 full-year volumes rising to approximately £8.1 billion, driven by a return of international equity seeking sustainable, long-term London assets.

In short, even as the wider economy stabilises, London’s prime rental market is thriving. Occupiers and investors are looking for quality, modern, and sustainable assets, ensuring that the premium segment continues to command record-breaking rent levels across the capital.

City of London & Southbank

The City & Southbank market has maintained strong leasing momentum throughout 2025 and into 2026. Take-up has remained steady, with recent activity levels consistently tracking above the ten-year average. This growth is driven by a flight to quality as professional and financial firms consolidate into higher specification buildings. The insurance and financial sectors remain the primary drivers of demand, accounting for approximately 29% of recent leasing activity, while legal firms have also shown significant interest in modernising their footprints.

Major landmark deals have defined the market over the last twelve months. Significant transactions include law firm Clifford Chance’s pre-let of 321,100 sq ft at 2 Aldermanbury Square and Herbert Smith Freehills’ commitment to 237,000 sq ft at 1 Appold Street. These deals, often securing rents upwards of £100 per sq ft, highlight the intense competition for buildings with the highest sustainability credentials. With active demand in Central London reaching roughly 13.2 million sq ft and a tightening pipeline of new completions for 2026, many occupiers are choosing to pre let space years in advance.

Against this backdrop, rental values across the City & Southbank have reached new benchmarks. In the City Core, prime rents have now surpassed £100 to £110 per sq ft for best in class tower space. Clerkenwell & Farringdon have seen a similar uplift, with prime rents rising to £105 per sq ft, while Midtown rents have climbed to £90 per sq ft. Because of the high demand for premium stock, rent free periods for a standard ten year lease have tightened slightly, now typically ranging between 21 and 24 months.

These figures show the ongoing focus on quality in the City & Southbank. Prime office space continues to command record rents as occupiers compete for locations that offer superior amenities and meet strict energy performance standards.

West End & West London Office Rent

The West End office market has entered 2026 with a level of urgency not seen in several years. Leasing activity remains high, with quarterly take-up consistently tracking around 1.1 million sq ft despite a severe shortage of best-in-class assets. This activity is largely driven by a demand for premium, sustainable workspaces, with over 70% of all deals involving new or comprehensively refurbished stock. The financial services sector, particularly hedge funds and private equity firms, continues to dominate, accounting for nearly 50% of all take-up in the West End core.

Recent landmark deals have underscored the strength of this submarket. High-profile transactions include major commitments at 77 Grosvenor Street and Southside Victoria, as well as the record-breaking pre-let of 218,496 sq ft at the M Building in Marylebone. These deals are increasingly setting new benchmarks, with prime floors in the most prestigious postcodes achieving rents between £185 and £240 per sq ft. The focus for occupiers has shifted heavily toward buildings that offer the highest environmental ratings and staff amenities to support long-term hybrid working strategies.

As demand for prime office space stays high, availability has reached critical levels. Total office availability in the West End has tightened further, with vacancy rates for newly built or refurbished space falling below 1%. In the most sought-after areas like Mayfair and St James’s, the vacancy rate for Grade A stock is effectively zero, making it difficult for businesses to find larger floorplates without planning 18–24 months in advance.

These market conditions have forced prime rents upward across all key submarkets. Mayfair and St James’s now lead with prime rents between £185 and £200+ per sq ft. Other areas have followed this trend, with Soho and Marylebone rising to £115 per sq ft, while Victoria and Covent Garden have reached £95 to £100 per sq ft. In West London, Kensington and Chelsea remain popular for boutique firms, with prime rents between £90 and £115 per sq ft. Due to the lack of supply, rent-free periods have shortened to 18 to 21 months on a typical ten-year lease.

With speculative development completions forecast to remain low through late 2026, the upward pressure on prime rents is expected to continue. Businesses are now having to compete more aggressively for the limited amount of high-quality office stock available in the West End, often committing to pre-let agreements to secure their future space.

Midtown Office Rent

In 2026, the Midtown real estate market has shown significant resilience as a high-value alternative to the West End. While previous quarters saw some volatility in take-up, the market has stabilised with a renewed focus on Grade A space in Holborn and Bloomsbury. Professional services and creative firms continue to drive activity, with recent leasing volumes reflecting a flight to quality as businesses prioritise buildings with high energy performance ratings and modern amenities.

The vacancy rate in Midtown currently sits at approximately 5.8%, which remains slightly above the long-term average but reflects a tightening supply of premium assets. Prime headline rents in the area have seen a notable increase, rising from previous lows to approximately £85 to £95 per sq ft. This growth is largely supported by the area’s excellent connectivity, particularly for buildings located near Elizabeth Line hubs, which continue to command a rental premium. As the development pipeline for 2026 remains limited, competition for the remaining top-tier floors is expected to keep rental levels strong throughout the year.

London’s Tech Belt

London’s Tech Belt has seen a strong resurgence in 2026, driven by its reputation as a global hub for innovation and creativity. Following a period of consolidation, take-up has stabilised as technology, media, and telecommunications firms seek high-quality, flexible workspaces. The Clerkenwell and Farringdon submarkets continue to lead the area in activity, largely supported by the long-term benefits of the Elizabeth Line, which has made these areas among the most accessible in the capital.

Leasing activity is currently led by the TMT and Creative sectors, which account for a significant share of the market, followed closely by professional services. One of the most significant recent developments in the area is the continued high demand for sustainable, ESG compliant buildings, which has led to a tightening of available prime stock. The vacancy rate in the Tech Belt has moderated to approximately 8.5%, though the availability of newly refurbished Grade A space remains much lower.

Rental values have shown steady growth over the last year. In Clerkenwell and Farringdon, prime rents have reached £105 per sq ft, reflecting the high value placed on proximity to major transport hubs. In other parts of the Tech Belt, such as Shoreditch and Old Street, prime rents typically range from £75 to £85 per sq ft. These figures highlight the continued appeal of the area for businesses that prioritise a vibrant local culture and top tier connectivity.

East London Office Rent

East London saw a 37% decline in leasing with six notable lettings, mostly in Docklands, totaling over 70,000 sq ft. The vacancy rate rose to 16.5% due to increased availability, and minimal construction and investment activities signal a cautious rental market ahead.

The distinction between office grades has become even more pronounced in 2026, driven largely by new environmental regulations and the shift towards hybrid working.

Grade A and Grade B Rent

Grade A office space represents the highest standard in the current market. These are typically new or comprehensively refurbished buildings that meet strict sustainability criteria, such as BREEAM Excellent or Outstanding ratings and EPC B or above to comply with upcoming 2030 targets. Modern Grade A offices include advanced features such as high-efficiency HVAC and ventilation systems with air-quality monitoring, superior natural lighting, and extensive amenities, including end-of-trip facilities (showers and secure cycle storage) and rooftop gardens. This tier is in extremely high demand as businesses use the workplace as a tool to attract talent and meet corporate ESG goals, leading to record-high asking prices in prime locations.

In contrast, Grade B offices are lower-specification spaces that are now often 30% to 50% less expensive than Grade A alternatives. These buildings are typically older, second-hand spaces in non-prime locations. They often lack modern climate control, have lower energy efficiency ratings, and may struggle to support the technological needs of a modern hybrid workforce. While they offer a much more affordable entry point for smaller businesses or start-ups, many Grade B buildings are currently being repositioned or converted to alternative uses as they risk becoming obsolete under new energy performance regulations.

In 2026, the market has seen a distinct bifurcation. The “flight to quality” has caused a surge in demand for Grade A space, resulting in vacancy rates for prime stock falling to below 1% in core submarkets. Meanwhile, demand for Grade B space continues to wane, with vacancy in this segment remaining high as occupiers prioritise high-quality, amenity-rich environments that encourage staff to return to the office.

The Widening Gap between Prime and Super Prime Rents

London’s commercial real estate landscape in 2026 is defined by record-breaking divergence in value. Data from leading authorities show that the “flight to quality” has evolved into a permanent market shift. While prime rents in core hubs have climbed significantly, a new tier of Super Prime pricing has emerged for buildings that offer exceptional sustainability and amenities. In the City, prime rents have now breached the £100 to £110 per sq ft mark, while the West End regularly sees rates between £185 and £210 per sq ft. For the most prestigious developments in Mayfair and St James’s, premiums are now as much as 50% higher than standard prime benchmarks.

This separation is growing year on year because the supply of high-quality space cannot keep up with demand. While overall London vacancy sits at approximately 9%, the vacancy rate for new Grade A space is critically low, often sitting below 1% in core postcodes. Research by BNP Paribas and Knight Frank highlights that roughly 80% of all vacant office space in London is now comprised of older Grade B stock, which many modern occupiers no longer consider viable for their hybrid working needs.

The post-pandemic recovery has matured into a structural re-pricing of the market. The legal and financial sectors continue to drive this trend, with law firms and private equity groups accounting for nearly 30% of all leasing activity. These occupiers are willing to pay significant premiums to secure buildings with the highest environmental ratings (BREEAM Outstanding) and modern air filtration systems. This intense competition for a thinning pipeline of new completions in 2026 means that the price gap between the “best” and the “rest” is expected to widen even further over the next three years.

Key Trends and Shifts in London’s Office Landscape

1. A Turn Toward “Uber-Luxurious” Office Spaces

A recent Economist article writes on a significant and ongoing trend in the demand for prime space in London, with rates rising to £135.00 per sq ft in the West End Core. Before the pandemic, workstations accounted for about 60% of office space. Now, refurbished and new offices are dedicating half that space to workstations, increasing the share for amenities from 5% to 20%. In London, properties like 105 Victoria Street expanded green spaces, adding up to 30,000 square feet of amenities like urban farms and “walk-and-talk” tracks.

Along with this, there is a surge in luxury features like meditation rooms, bike storage, showers, outdoor spaces, and even concierges and rooftop bars, all aimed at making life as comfortable as possible for workers. It’s not just about luring them back to the office but also aiding recruitment in a competitive labour market.

2. An Exodus from Traditional Financial Hubs

Recently, financial districts like London’s Canary Wharf are feeling the strain of shifting trends in London’s commercial property market. Major tenants, including banks like HSBC and Credit Suisse, are exiting traditional financial districts, leaving the ageing skyscrapers in the area vacant. This exodus has been triggered by a post-pandemic shift in working styles which is reducing the need for vast office spaces.

Recognising the need for a “new purpose,” the Canary Wharf Group (CWG) is shifting its focus towards diversification including the science, retail, and housing sectors. With the ongoing development of Britain’s first laboratory skyscraper at North Quay, Canary Wharf aims to “redraw the life sciences map of London.” Residential projects such as Wood Wharf also signal a move towards creating a mixed-use community with leisure facilities, green spaces, schools, and medical services, reflecting a shift in what Londoners want from their city.

As Shobi Khanm – Chief Executive of the Canary Wharf Group (CWG) explains:

London is undergoing constant reinvention as the needs of its diverse, growing population change … Eight years ago, we recognised that Londoners increasingly wanted to live and work in vibrant communities with green space, leisure facilities, shops, restaurants, schools and medical services — all within easy reach.

This reinvention includes the transformation of Canary Wharf into a more vibrant community that serves the changing needs and lifestyles of its residents and businesses. The Canary Wharf 2.0 initiative is a prime example of this transformation, already making the estate home to over 3,500 residents.

The transition from traditional financial centres is not simply a matter of vacancy but an opportunity for reinvention and diversification. The ability to adapt to these changes will shape the future of London’s financial districts, positioning them to thrive in a new era of work and community life.

3. Emphasis on Mixed-Use Locations

Contrary to the decline in London’s traditional financial hubs, Mayfair is booming. The appeal of locations closer to amenities such as shops and restaurants, along with the move towards smaller and more flexible office spaces, is driving this trend.

To breathe new life into these regions, urban planning is shifting towards mixed-use spaces that combine residential, retail, and offices, following the “15-minute city” concept (communities where all essential services and amenities are accessible within a 15-minute walk or cycle ride from people’s homes). The emphasis on more integrated, convenient, and lifestyle-oriented spaces means that traditional financial districts must evolve to avoid obsolescence.

4. Rising Vacancy Rates and Challenges

Vacancy rates are soaring in once-bustling financial districts. The rate has reached 15% in Canary Wharf, with similar trends observed elsewhere in Europe. These high vacancy rates present a high-risk investment challenge, threatening to turn these districts into ghost towns.

5. London Tech Hubs and Growing AI Sector

With burgeoning technological capabilities, London is becoming one of the leading global hubs for technology and artificial intelligence (AI). Its unique positioning has already drawn some of the most prestigious organisations in the field. OpenAI’s decision to choose London for its first international office marks a significant milestone, reflecting the city’s strategic importance in expanding the frontiers of artificial general intelligence (AGI).

In addition to OpenAI, London has attracted other key AI establishments like DeepMind, Google’s renowned AI lab situated in Kings Cross, and Anthropic, which has also opened an office in the city. Palantir Technologies, a specialist in data analytics, has selected London as its European headquarters for AI research and development. With 10 offices in Europe and approximately 850 UK-based employees, Palantir’s decision accentuates London’s allure for firms scaling up their focus on AI. The presence of such technological giants is a testament to London’s appeal, and it undoubtedly benefits from the UK tech sector’s distinction as the #1 in Europe and #3 globally, indicative of the sector’s resilience and continuous growth.

6. A Flight to Quality – Prime Rent in London

The “flight to quality” in London’s office space market is more than a mere trend, reflecting a broader shift towards environmental and sustainability goals. This focus on quality is an intelligent investment strategy that resonates with the current economic landscape. Assets that do not align with investor and occupier expectations are becoming increasingly marginalised, fuelling a movement towards buildings that epitomize quality, flexibility, and sustainability.

Despite facing challenges, London’s office market remains resilient, adaptable, and innovative. Adaptation to new conditions is an economic necessity and an opportunity to reimagine London’s office spaces. Embedding quality, flexibility, and sustainability at its core is not just a response to market forces, but a proactive embrace of a more responsible future.

7. EPC Regulations and Their Effect on Office Space Quality

The year 2023 is a transformative period for London’s office rents, and new regulations are setting the pace. EPC rating regulations, effective from April 2023, define the roadmap for energy efficiency in commercial properties. The requirement for buildings to reach a standard rating of ‘E’ is poised to rise to ‘C’ by 2027 and ‘B’ by 2030.

From April 2023, landlords of commercial properties in England and Wales are prohibited from letting properties with an EPC rating of ‘F’ or ‘G’ (sub-standard), unless exemptions are in place. These regulations have become a significant factor in shaping trends in London’s office space development, refurbishments and letting. This regulatory alignment with environmental priorities furthers the flight to quality in the market, reinforcing London’s commitment to sustainability.

8. ESG, BREEAM and Net Zero Carbon Buildings

The growing significance of Environmental, Social, and Governance (ESG) factors, alongside BREEAM certifications, has become an essential consideration in London’s real estate market, especially within the prime office space. This trend is highlighted in a recent report from Knight Frank’s Sustainability Series, focusing on how BREEAM certifications impact prime Central London office rents.

BREEAM, which stands for Building Research Establishment Environmental Assessment Method, was first established in Watford, north of London, in 1990. Recognised as the world’s leading sustainability assessment method, BREEAM ensures that buildings are more durable, resilient, and eco-friendly, often resulting in payback within 2-5 years through utility cost savings alone.

The research, conducted in collaboration with BRE, utilised a hedonic regression model to quantify the effect of BREEAM certifications on prime Central London office rents. Analysing data from more than 2,700 Central London office buildings, the study found a positive impact on rents for buildings rated as Very Good, Excellent, or Outstanding. The premiums ranged from 3.7% to 12.3%, with Outstanding BREEAM buildings commanding the highest rental increase.

Moreover, the research uncovered other significant factors affecting Central London office rents. Proximity to public transport, size and number of floors, green space nearby, building grade, and location within walking distance of a National Rail station were among the variables that positively impacted rents. This combination of attributes, location, and surrounding area, along with BREEAM ratings, illustrates a multifaceted approach to determining rental values.

Beyond the physical attributes and location, the growing emphasis on sustainability is also driven by top-level investor pressure, regulatory changes, risk mitigation, and a desire to align with global climate goals. The development of Net Zero Carbon Buildings in London showcases a tangible commitment to reducing carbon emissions. As part of this trend, London’s office space market is not only contributing to global environmental stewardship but also recognising the financial benefits of green-rated buildings.

Victoria Ormond, a Partner in Knight Frank’s Capital Markets Research team, stresses the novelty and significance of this research. She points out that while there’s a general understanding of the importance of ESG, quantifying how sustainability adds monetary value is a novel concept. For investors, landlords, and developers, understanding the impact of green ratings on income is crucial, especially since they can result in substantial rent premiums.

These findings are expected to have far-reaching implications for the London investment market. Investors seeking to differentiate their buildings and align with occupiers’ values may benefit from a ‘green value premium.’ Such assets are likely to increase in liquidity and, conversely, ‘non-compliant’ buildings risk losing value quickly, becoming ‘stranded’ and obsolete.