Strong First Half Underpinned by Large Lettings
Occupier activity strengthened considerably across Central London during Q2 2026, with take-up reaching 3.0m sq ft, representing a 26.0% increase on the previous quarter. The improved quarterly performance lifted total H1 2026 take-up to 5.5m sq ft, reflecting a 9.6% increase compared with the same period in 2025. Activity remained comfortably above both the five-year H1 average of 4.8m sq ft and the ten-year H1 average of 5.4m sq ft, demonstrating continued resilience in occupier demand. The strength of activity during the first half of the year has been driven by renewed confidence amongst larger corporate occupiers, particularly those seeking high-quality office accommodation in core Central London.
The robust first-half performance was supported by a notable increase in larger transactions, with 16 deals exceeding 50,000 sq ft completing during H1 2026. Two of these ranked amongst the three largest transactions recorded during the first half of the year. Lockton Companies completed a pre-let for c.233k sq ft at The Mark, Mark Lane, EC3, representing one of the largest office pre-lettings secured in Central London in recent years. Meanwhile, Anthropic committed to c.158k sq ft at 1 Triton Square, NW1, reinforcing the continued willingness of major occupiers to secure premium, sustainable accommodation well in advance of completion.
Tech Continues to Lead Demand
Media Tech remained the dominant source of occupier demand throughout Q2 2026, accounting for 25.7% of quarterly take-up and 24.7% of all activity across H1. The sector’s performance was underpinned by several significant transactions, including the major commitments from Anthropic and Microsoft, with the latter securing c.97k sq ft at Film House, Wardour Street, W1F. The building, formerly occupied by Associated British Pathé, will become home to Microsoft’s UK-based AI teams, further highlighting London’s continued attractiveness as a destination for global technology.
Prime Rental Growth Reflections Competition
Rental growth continued across Central London’s core office markets as competition for high-quality accommodation remained intense. The West End once again led the market, with prime rents increasing to a record £180 psf, representing annual growth of 5.9%. The City also continued its upward trajectory, with prime rents rising by 8.6% year-on-year to £95 psf, while premium rents have now reached £150 psf, widening the differential between prime and premium accommodation to almost 58%. This sustained rental growth reflects the ongoing imbalance between occupier demand and the limited availability of best-in-class office space. Similar trends have also been evident across Midtown and Southbank, where prime rents increased by 6.1% year-on-year, demonstrating that occupiers continue to prioritise quality, sustainability, connectivity and workplace experience when selecting office accommodation.
Falling Supply Continues
Central London office supply remained on a downward trajectory during Q2 2026, with total availability standing at 22.8m sq ft at the close of the quarter. This represents a marginal quarterly decline of 0.2% and a more notable year-on-year reduction of 5.0%, reflecting the continued absorption of available space across the market.
Overall vacancy across Central London remained broadly stable during Q2 2026, standing at 8.4% at the end of the quarter, a marginal reduction of 2 basis points from Q1 and 56 basis points below the same period last year. Vacancy also continues to sit comfortably below the five-year quarterly average of 10.4%, highlighting the ongoing recovery in occupational markets. Consistent leasing activity, resilient demand for high-quality accommodation and a moderation in new development completions have all contributed to the continued tightening of market conditions.
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