Despite a slowdown, Q3 take-up reached 2.6 million sq ft, underpinned by sustained demand from financial, tech, and media occupiers. Pre-letting activity remains a defining feature of the market, driven by limited premium supply in core locations.
Key Market Highlights:
- Take-up trends: Q3 activity moderated from Q2’s surge of 3.2 million sq ft, reflecting fewer large-scale lettings, though underlying demand remains robust.
- Supply dynamics: Speculative development remains scarce, with most new completions pre-let, intensifying competition for best-in-class space.
- Vacancy: All-Grade vacancy fell to 9.2%, its lowest level in nearly four years, signalling tightening conditions across submarkets.
- Rental growth:
- West End prime rents advanced 5.6% year-on-year, supported by strong occupier appetite for premium floors.
- City prime rents climbed for the fourth consecutive quarter to £95.00 psf, marking an impressive 12.6% annual growth.
- Investment volumes: Q3 office investment totalled £1.28 billion, subdued compared to historic norms but underpinned by selective acquisitions and a growing pipeline of assets under offer.
These dynamics underscore London’s enduring appeal to occupiers and investors, with structural demand drivers and constrained supply setting the stage for continued rental growth and renewed investment momentum into 2026.