UK London Office Marketbeat Reports

For the data behind the commentary, download the full Q3 2025 UK London Offices Report.

Where will demand go?

Recently, demand has concentrated heavily into top quality space in core locations. In fact, Grade A take-up in the City Core and West End Core (Mayfair & St James's) submarkets accounted for 30% of all Central London leasing activity between 2022-25Q3, versus a 21% share from 2015-19.

Looking ahead over the development pipeline, there is 7.18 million sq ft of space under construction and available or likely to deliver by 2030. Grade A take-up levels over the past three years in these core submarkets have averaged 2.99 million sq ft combined per annum. With these levels expected to continue, the outlook is therefore for supply to be considerably outweighed by demand over the medium term.

Grade A availability levels in these core submarkets are expected to drop below 1.0 year's supply of average Grade A demand from 2026 onwards. This presents a strong story for core rental growth, but also raises the question of where will demand go given this significant shortfall of stock?

When similar levels of supply shortages in core markets have been seen in the past, two things have happened: take-up of secondary Grade B stock in core locations has increased; and overall take-up in non-core locations has also increased.

The trigger level for instigating this diversification of demand in the past has been around the 1.0 years' supply level. When Grade A supply falls below this level, core Grade B take-up has averaged 20% outperformance versus the long-term average. Similarly, non-core overall take-up averaged 18% ahead of the typical level over the last 20-years.

With Grade A supply in core markets projected to fall below this level as soon as 2026, history may well be about to repeat itself.