Central London Experiences Steadiness
Q3 2025 marked a relatively stable quarter for the Central London office market, with total take-up reaching 2.7 million sq ft, representing a 12.9% decrease on Q2 2025. This steady performance brought year-to-date activity to 8.9 million sq ft, a 19.3% uplift on the same period in 2024, and significantly ahead of both the five-year (7.0 million sq ft) and ten-year (8.5 million sq ft) Q1–Q3 averages.
Market activity during the quarter was supported by a broad mix of transactions across size bands. While only nine deals exceeded 50,000 sq ft, a quieter quarter for large lettings was seen. Overall take-up remained buoyant, reinforced by nearly 300 transactions below 10,000 sq ft. This demonstrates the strength of the smaller occupier market, which helped offset a more subdued mid-size and large-letting brackets.
Banking & Finance Drive Activity
Two landmark transactions stood out: Herbert Smith Freehills’ pre-let of approximately 237,000 sq ft at 1 Appold Street, EC2, one of the largest pre-lets in recent years, and HSBC’s 210,000 sq ft commitment at 40 Bank Street, E14, reflecting the continued appetite for high-quality buildings as occupiers adapt workplaces to hybrid models and higher ESG standards.
By sector, Banking & Finance led Q3 activity, accounting for 25.0% of total take-up and maintaining dominance year-to-date at 28.4%. Key deals included HSBC’s 210,000 sq ft letting in Canary Wharf and General Atlantic’s pre-let of 50,000 sq ft at The Elephant, Oxford Street, W1C, part of the occupier’s London expansion into a fully electric, sustainability-focused development due to complete in 2026.
Supply Demands Premium
On the rental front, the West End remains the most expensive submarket, with prime rents stable at £170 per sq ft, up 6.3% year-on-year. The City followed closely with prime rents at £87.50 per sq ft - a 6.1% annual rise - and premium space now commanding up to £140 per sq ft.
Central London office supply closed Q3 2025 at 23.5 million sq ft, reflecting a 1.8% quarterly decrease and a 16.1% fall year-on-year. The reduction in available space highlights the continued strength of occupier demand for prime, best-in-class offices, as tenants increasingly prioritise high-quality, sustainable, and well-located buildings. In Q3 2025, Grade A space accounted for 72% of total take-up, underlining this ongoing focus on quality.
Record low vacancies reflect unwavering confidence in high quality, ESG compliant offices, deepening the divide between future proof and secondary offices.
Vacancy Continues To Fall
The overall vacancy rate across Central London fell to 8.4%, down from 8.6% in the previous quarter and 173 basis points lower than a year ago. This level now sits well below the five-year quarterly average of 10.3%, indicating that the elevated vacancy seen during the pandemic period continues to recede.
The West End remains the strongest submarket when it comes to vacancy, with Q3 levels at just 6.4%, well below the five-year average of 7.3%. It also continues to record the lowest Grade A vacancy across Central London, just 1.2%, and several core sub-locations now have rates below 0.5%. In the City, vacancy stood at 9.9% at the end of Q3 2025, comfortably beneath the five-year average of 13.1%. Within the City Core, vacancy dropped further to 9.2%, while Grade A availability remains constrained at 2.8%.
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