A Guide to Office Rent in London

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 rent for over £150 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.

Latest Market Figures

Recent data from Costar’s February 2025 London Office Market Report shows some important challenges. Overall office vacancies have risen to 10.7%—a 20-year high—due to nearly 15.2 million sq ft of new space under construction. While leasing picked up after Q1 2024, the large amount of new supply is expected to lower rents, especially for older or lower-spec offices.

Despite this, premium buildings still attract strong interest. In Q3 2024, 2.56 million sq ft of office space was leased—a 21% increase from the previous quarter—with Grade A deals making up 70% of the total, compared to a 59% ten-year average. The City led the activity with 1.5 million sq ft (67% Grade A), while the West End contributed 1 million sq ft (74% Grade A). In some parts of the City, rents reached £122 per square foot, highlighting the gap between top-quality properties and older ones.

Additionally, at the end of Q3 2024, there were 3.1 million sq ft of office space under offer—an 8% increase over Q2—with 73% of that space being Grade A.

How does this affect renting an office in London?

If you’re planning to rent an office in London, these figures highlight the importance of timing. If you’re interested in premium, centrally located spaces, be ready to act quickly because demand is very high, which can slow down lease negotiations.  It’s a good idea to start your search and negotiations 12 to 18 months before your move offices, and to get in touch with a fit-out company early to make sure your new office meets your needs and style.

Supply Outlook and Future Trends

Currently, Central London has about 27 million sq ft of office space with an average vacancy rate of 9.3%. However, there are signs that this may change over the next year. With fewer new developments coming in, especially since more than half of the 8.3 million sq ft of speculative space expected by the end of 2025 is already planned, rents in key areas could start to increase.

For businesses looking to rent office space, this means that while space is available now, the market could become tighter in the near future. Whether you’re planning to expand, relocate, or carry out an office fit-out, understanding these trends can help you make smarter decisions about timing 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 market challenges and a pull‐forward in deal activity in Q4 2024, prime rental rates across London continue to demonstrate exceptional resilience. A shortage of best‑in‑class, modern office spaces has driven prime rents higher in key submarkets:

• West End: The premium sector is leading the charge, with prime rents reaching an impressive £150 per sq ft. This reflects not only the scarcity of top‑tier assets in the West End but also the robust appetite from occupiers seeking modern, sustainable workspaces.
• City Core: In the heart of the capital, prime rents have seen a more modest increase, settling at around £87.50 per sq ft—a level that underscores the steady demand for quality space amid challenging market conditions.
• Emerging Submarkets: Areas such as Farringdon and Midtown have also shown strength, achieving prime rental levels of roughly £95 per sq ft and £80 per sq ft respectively. These figures highlight a continued flight to quality as tenants focus on securing high‑specification, energy‑efficient assets.

While overall deal activity in Q4 2024 saw a contraction—with under offers across Central London totaling 2.6 million sq ft and 11 large transactions (each over 50,000 sq ft) collectively amounting to around 815,400 sq ft—the sustained strength in prime rents signals that demand for top‑quality office space remains robust. Investment activity further supports this narrative, with volumes rising 22% quarter‑on‑quarter to reach £1.6 billion (lifting the full‑year total to £4.9 billion), driven by both domestic and overseas buyers.

In summary, even as leasing volumes fluctuate, London’s prime rental market is thriving. Occupiers and investors are placing their bets on quality, modern, and sustainable assets, ensuring that the premium segment continues to command leading rent levels across the capital.

City of London & Southbank

The City & Southbank market has maintained strong leasing momentum, with take-up increasing by 7.9% in Q3 2024 to 1.8 million sq ft—13.7% above the long-term quarterly average. This growth has been driven by sustained demand from professional services and financial firms, particularly hedge funds and private equity groups, which saw take-up surge by 183.0% quarter-on-quarter. Legal occupiers have also rebounded significantly, now representing 62.9% of all professional services take-up.

The largest transaction of the quarter was Legal and General Investment Management’s pre-let of 186,648 sq ft at Woolgate, 25 Basinghall Street, EC2. The deal, which secured rents between £80.00 and £89.50 per sq ft, highlights the appeal of high-specification, sustainability-focused office space in prime locations. With active demand rising to a 10-year high and floorspace under offer increasing to 2.2 million sq ft, occupiers are continuing to prioritise Grade A and ESG-compliant properties.

Against this backdrop, rental values across the City & Southbank have remained strong. In the City Core, prime rents have increased reaching £90 per sq ft. Clerkenwell & Farringdon saw a similar uplift, with prime rents rising to £92.50 per sq ft, while Midtown rents climbed to £82 per sq ft. Rent-free periods for a standard ten-year lease have remained unchanged at 24–27 months.

These figures reinforce the continued flight to quality in the City & Southbank, with prime office space commanding premium rents as occupiers compete for the best-in-class locations.

West End & West London Office Rent

The West End office market rebounded strongly in Q3 2024, with leasing activity reaching 1.2 million sq ft, marking a 78.1% increase quarter-on-quarter and exceeding the long-term average by 11.7%. The sharp uptick in take-up was largely driven by larger-size band lettings, with four deals surpassing 40,000 sq ft and two exceeding 100,000 sq ft. Notably, the professional services sector saw a significant surge, with take-up rising 217.8% above the quarterly trend, fueled by major transactions in the accounting, legal, and architectural sectors.

One of the most notable deals of the quarter was BDO’s record-breaking pre-let of 218,496 sq ft at the M Building in Marylebone—the largest-ever letting in the area. Additionally, Evercore Partners Limited pre-let 135,239 sq ft at Southside, 105 Victoria Street, SW1, marking the highest-value pre-let deal in Victoria.

As demand for prime office space continues to grow, availability has tightened. Office availability in the West End fell by 3.6% in Q3 to 7.4 million sq ft, with new and refurbished space dropping by 1.3% to its lowest level in two years. Vacancy rates for new space have now fallen to 1.3%, and in the West End Core, they are as low as 0.3%, underscoring the scarcity of best-in-class office stock.

These market conditions have driven prime rental growth in key submarkets. Mayfair and St James’s continue to lead with prime rents at £150 per sq ft, while Strand/Covent Garden and Victoria saw rental increases to £90 per sq ft and £92.50 per sq ft, respectively. In West London, Kensington and Chelsea remain highly sought-after, with prime rents at £70 – £85 per sq ft and £80 – £97 per sq ft. Rent-free periods remain stable at 24–27 months on a standard ten-year lease.

With supply constraints intensifying and speculative development falling short of demand, prime rents in the West End are expected to remain strong, particularly in submarkets where high-quality office space is becoming increasingly scarce.

Midtown Office Rent

In Q2, Midtown’s real estate market saw a decline, with take-up just under 65,000 sq ft, 36% down from the previous quarter. There were no large transactions over 20,000 sq ft, and the largest was 18,837 sq ft at 75-80 High Holborn, WC1. The vacancy rate decreased for the third consecutive quarter to 5.4%, still above the 10-year average of 4.3%. Prime headline rents remained stable at £76.67 per sq ft.

London’s Tech Belt

There was a significant decline in take-up in London’s Tech Belt, amounting to just over 107,000 sq ft, marking a drop of 63% from the prior quarter and nearly 73% below the decade’s quarterly average. The most notable transaction involved Pentland Brands acquiring 30,896 sq ft at The Johnson Building, Hatton Garden, EC1. The activity was primarily led by the Consumer & Private Services sector at 29%, followed by the TMT & Creative and Professional Services sectors. Despite the recent peak, the vacancy rate moderated to 9.3%. Prime rents witnessed a marginal decrease, averaging £73.33 per sq ft, although the Clerkenwell & Farringdon submarket retained the highest prime rent at £92.50 per sq ft.

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.

Grade A and Grade B Rent

Grade A office space is typically new, pristine, recently built, or recently fitted-out space that includes finishes such low energy lighting, efficient HVAC/ventilation systems, enhanced natural lighting, high-end toilet and reception areas or lift lobbies and other high-end finishes such as metal pan ceilings. Grade A is typically the top tier of the market, often in high demand, with high asking prices for rent reflecting quality and location.

In contrast, Grade B offices are lower-spec spaces, typically being at least 30% less expensive than Grade A spaces. They are characterised by second-hand, older space, typically not in non-prime locations of city centres, and often without air conditioning / HAVC.

Post-pandemic, the requirements for hybrid working, enhanced ventilation systems, and higher quality have driven demand for Grade A office space, while at the same time reducing demand for Grade B.

From Prime Rents to Super Prime Rents

London’s commercial real estate landscape for Q2 2023 continues to reflect a nuanced scenario, as recent data from Avison Young, JLL, and Knight Frank illustrate. Prime rents in London’s core hubs remain stable, while the City currently averages around £75 per sq ft and the West End around £130 per sq ft. However, there’s an emergent trend of super prime rents in areas like Mayfair, and St James’s, as well as new developments across the City, seeing premiums as high as 35%.

In stark contrast, prime space availability is constrained relative to demand. Despite the overall availability increasing by 7.5% to 25.8m sq ft this quarter, prime space is concentrated in fewer buildings. In the core City and West End submarkets, only 15 buildings above 60,000 sq ft are available. This tightening of prime space is exacerbated by the fact that 58% of all market availability is new or refurbished, but these only account for 43.3% of the buildings.

The post-pandemic recovery is led by a flight to superior-quality buildings. Notably, the legal sector has dominated this movement, as exemplified by deals like Goodwin Proctor’s acquisition at Sancroft and Dentons LLP’s pre-let at 1 Liverpool Street. These transactions have boosted the professional services sector’s take-up, accounting for 27.7% of all deals, and surpassing trend levels by 61.8%. Additionally, financial entities, particularly non-banking financials, were also active, exceeding long-term averages by 15.4%.

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.