Strong Half-Year Performance
Q2 2025 recorded a notably strong quarter for Central London office take-up, with activity reaching 3.20m sq ft—representing a 3.1% increase compared to Q1 2025. This solid quarterly performance contributed to a total of 6.31m sq ft transacted during H1 2025. The half-year figure marks a significant 30.3% uplift compared to H1 2024 and stands well above the five-year H1 average of 4.54m sq ft, as well as the ten-year H1 average of 5.47m sq ft. The strength of activity this year highlights a marked return in occupier confidence, particularly among larger corporate occupiers.
Occupiers Driving Activity
Banking & Finance led the market in Q2 2025, accounting for 35.6% of quarterly take-up, and remained the dominant sector across H1 with a 29.1% share. This level of activity was underpinned by the major deals outlined above, alongside JP Morgan’s acquisition of c.145k sq ft at 1 Cabot Square, E14.
Professional Services was the second most active sector in Q2 2025, representing 13.3% of take-up and contributing 18.84% to H1 activity overall. This included several substantial lettings, notably LifeArc’s pre-let of 70,000 sq ft at 105 Judd Street, WC1.
Supply Pushes Premiums
In terms of rental performance, the West End continues to lead with prime rents reaching a new high of £170 psf, an annual growth rate of 6.3%. The City is following closely behind, with a 9.4% y-o-y increase pushing prime rents to £87.50 psf. Premium rents in the City have now hit £130 psf, widening the gap between prime and premium stock by 32.7%.
Central London office supply stood at 23.98m sq ft at the end of Q2 2025, reflecting a q-o-q of 6.4% and a y-o-y fall of 13.9%. This contraction in available space has been driven by sustained occupier demand for best-in-class buildings, with continued demand for high quality stock.
In H1 2025, Grade-A space accounted for 70% of total take-up, underscoring the preference for prime, modern, and sustainable offices. As a result, Grade-A vacancy has reached historically low levels, while most of the available supply now consists of second-hand stock—71.8% of the current total is Grade B space, which can be seen a positive market trend for occupiers seeking cost effective space in Central London.
"Grade-A space continues to dominate demand as tight supply and strong appetite push core market prime rents higher"
Vacancy Continues To Fall
Overall vacancy across Central London fell to 8.3% in Q2 2025, down from 8.9% in Q1. While this still sits 146 basis points above the same point last year, it remains well below the five-year quarterly average of 9.9%, suggesting that elevated vacancy levels seen during and post-pandemic are continuing to ease. The improvement is largely attributed to steady leasing activity, robust demand for high-quality offices, and a moderation in the delivery of new space.
The West End continues to be the top-performing submarket. Vacancy here sits at 6.4%, well below the five-year average of 7.3%. In the City, overall vacancy measured 9.1% at the end of H1 2025, comfortably beneath the five-year average of 11.8%. These figures highlight the ongoing bifurcation in the market between newer, ESG-compliant stock and lower-grade, less desirable space.
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