Welcome to your latest Central London office market watch, exploring insight from the City and West End office occupational markets
Across the Central London market
At the end of July, Central London take-up reached 488,221 sq ft as July showed signs of the typical seasonal deceleration to leasing activity. In the City, the largest three transactions of July accounted for just under half (47%) of this month’s take-up and was driven by BMS’s relocation into 30 St Mary’s Axe, EC3 (64,000 sq ft). In the West End, transactions during the month were predominantly driven by sub-5,000 sq ft transactions completing, bringing year-to-date (YTD) take-up for the West End to 1.8 million sq ft, up 4% on the same period during 2024. The largest transaction to complete in July was Sarasin & Partners’ acquisition of Fifty George, W1 (32,651 sq ft). This brought overall Central London YTD take-up to 5.3 million sq ft, which is up 4% on the same period last year.
The outlook for leasing continues to remain positive, with active demand remaining at 13.5 million sq ft. Savills has revised its City average prime rental growth forecasts up 20 bps to 4.2% per annum over the 2025–2029 period and the West End by 10 bps to 4.1% per annum, indicating a more optimistic outlook for prime rental growth. Currently, the average prime rent across the City market stands at £99.72 per sq ft, while the average West End prime rent is £169.85 per sq ft.
City Highlights
West End Highlights
Refurbishing and repurposing London offices
The Central London office market is undergoing a shift, driven by heightened focus on sustainability, changing occupier preferences, and evolving planning policy. At the heart of this transformation and at two opposite ends is the growing divide between prime, ESG-compliant buildings and secondary stock that risks becoming obsolete. Between January and July this year, 65% of leasing activity occurred in buildings rated BREEAM ‘Excellent’ or ‘Outstanding’, up from 57% over the same period last year. And whilst occupier demand remains robust, with active demand remaining 50% above the long-term average, the continued preference for best-in-class space underscores the waning demand for secondary space with no or lower credentials, particularly older buildings in more fringe locations.
Cost structures and planning considerations are reshaping development strategies. In the first half of 2025, 72% of construction starts were refurbishments, up from 66% in the first half of 2024 and just 62% in 2023.
As London’s office market continues to evolve, one trend is becoming increasingly clear: more landlords and developers are exploring change-of-use opportunities for assets that no longer align well with office occupier preferences. In general, investors are targeting older buildings with vacant possession or short-term leases, viewing them as good opportunities for hotel or mixed-use conversion. Across Central London, 1.1 million sq ft has been acquired for the purpose of change of use in H1 2025, compared to 1.4 million sq ft in the whole of 2024.
Notably, the West End has accounted for over 500,000 sq ft of this activity – already surpassing annual totals from each of the past four years (this has been driven by Arora Group purchasing 102 Petty France, Westminster, SW1, for £245 million, with the company’s COO indicating that the property will likely be redeveloped into a hotel). In the first half of this year alone, 429,000 sq ft of office space across seven buildings in the City were bought with the intention of being converted into hotels, already surpassing the total seen in all of 2024. The largest of which is Morley House, 26–30 Holborn Viaduct, EC1, a vacant site that has a planning consent for a 274-key hotel development. This uptick is partly driven by the City’s push to diversify its offering beyond office use, alongside rising demand for hospitality space fuelled by increased tourism, corporate travel, and the need to support a growing seven-day economy.
Furthermore, when looking at the future potential Central London development pipeline, around 4.3 million sq ft of schemes, at present, are believed to be potentially considering repurposing for alternative uses, 72% of which is located in City Fringe or West-End Fringe sub-markets.
While the changing landscape of the London office market and changing occupier preferences pose challenges, they also present a significant opportunity to reposition underperforming assets. The future of Central London’s office market will be shaped not just by new developments, but by the city’s evolution into a more dynamic, mixed-use environment where offices, retail, leisure, and residential spaces increasingly coexist and complement one another.
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