Build: Perspective – Central London Offices

The Central London office market entered 2026 with fundamentally tight conditions. Though take-up in 2025 ended close to long-run norms, the composition of demand reinforced the quality divergence that has defined the post-pandemic cycle: depth remains strongest for ESG-compliant, highly amenitised space concentrated in the City Core and the West End’s most established pitches. Take-up through 2025 illustrated this bifurcation clearly. Central London recorded 9.43 million sq ft of leasing for the year, above the five-year average but below the ten-year trend. Take-up is strongly focused on best-in-class across London, with Grade A accounting for its highest ever share of take-up at 93% in 2025.

Supply conditions, however, are defined by scarcity at the top of the market. Across London, availability has drifted downwards, but in Grade A towers, the constraints are acute.

Vacancy within City towers has been extremely tight since 2025, and the new benchmark rent of £145 psf at 8 Bishopsgate, which has already been surpassed this year, demonstrating occupiers remain willing to compete for best-in-class space. Prime City rents ended the year at £105.26 psf, up 6.8%, with Grade A rising 4.1%. In practical terms, the scarcity of premium large floorplate options is dictating pricing power, lease-term flexibility and negotiation dynamics.

Pipeline dynamics are increasingly shaped by construction costs and timeline friction. The UK construction sector exited 2025 in a subdued but stable state, with 2026 tender price inflation revised up to 3.0% (from 2.5%). The uplift is cost-driven, reflecting persistent materials and compliance pressures, rather than evidence of a demand-led recovery. While headline completions for Central London are forecast to reach 8.6 million sq ft in 2026, the delivery profile is skewed: roughly one third of completions sit in Q4. By contrast, 2027–28 should mark a return to more typical delivery volumes.

Development starts provide the clearest indicator of tightening, which fell sharply through 2025, and although year-end totals broadly regained alignment with long-term averages, the West End remains an outlier, recording its lowest start levels since 2022. With 46% of the 2026–30 pipeline yet to start construction, slippage risks remain, both from cost inflation and from the ongoing drag associated with Building Safety Act compliance and fit-out complexity. These delays reinforce the medium-term supply gap for prime, ESG-led stock and maintain upward pressure on the best space.

From a pricing and strategy perspective, these dynamics are converging into a clear pattern. The combination of constrained premium supply, preference for sustainable buildings and cost-induced development delays suggests further rental growth at the top end. As prime rents push into new territory, some occupiers may consider locations outside of the core that have good connectivity, although we are yet to see evidence of this. The Docklands, which we track separately from our Central London data, stands as one of the areas that could benefit. Here, take-up in 2025 was at its highest level since 2019, as the market continues to reinvent itself as a mixed-use location.

_{Read the articles within Savills Build: Perspective report below}