The Q2 2025 Central London Office Market
The latest data on the Central London office market reveals a mixed but promising picture for occupiers and landlords alike. Despite economic uncertainty, both the City and West End have shown resilience, with leasing volumes broadly in line with recent averages and clear signs of demand for high-quality office space emerging.
The City Market
In the City, Q1 2025 recorded 1.2 million sq ft of take-up across 101 transactions. While this figure is 13% below the ten-year average, it aligns with the five-year average, suggesting the London office market has stabilised after recent volatility. Since the end of Q1, leasing activity has surpassed first-quarter volumes, signalling continued momentum.
A standout trend in the City has been the emergence of the tech and media sectors as the leading driver of demand, accounting for 23% of take-up in Q1. High-profile transactions by firms such as Trainline, PayPal and SS&C Technologies reflect a continuation of a return to the office and renewed sector growth. This shift emphasises the need for flexible, future-proof workspaces to accommodate the evolving needs of tech-driven businesses.
Supply in the City stood at 10.1 million sq ft at the end of Q1, translating to a vacancy rate of 7.2%, signalling a tight supply and a market favouring landlords. However, there is still significant pressure on landlords to deliver prime rental space, with Grade A rental bringing in £73.47 per sq ft, up on Grade B rent averages, which were recorded at £41.65 per sq ft at the end of Q1. The flagship deal of Q1 saw Allfunds Group set a record rent for SE1, at a blended rent of £98.75 per sq ft over two floors. Prime rents are forecast to rise by 4.5% over the year, reflecting continued demand for best-in-class offices.
The West End Market
Despite a slow start and continued economic headwinds, the West End market delivered a surprisingly robust Q1 performance. Take-up totalled 755,551 sq ft across 86 transactions, which is 20% higher than the Q1 2024 figures and 11% above the five-year average. March alone contributed nearly 475,000 sq ft of activity.
Financial Services remained the dominant driver of leasing activity, accounting for 31% of take-up in Q1, while the combined Financial and Banking sectors recorded the second highest activity level in 15 years. The Tech & Media sector followed with 19% of take-up, with the number of transactions surpassing the five-year average, particularly in the sub-10,000 sq ft segment, which reached its highest level since early 2020.
Under offers in the West End rose sharply to 977,281 sq ft, back to levels last seen at the end of 2024. Larger under offers in the core include McDermott Will & Emery negotiating the entire former Fenwicks store on Brook Street (106,000 sq ft) and multiple parties at 33 Jermyn Street (65,000 sq ft). If these deals complete, they will be key benchmarks for prime West End rents, particularly in Mayfair and St James’s.
While the West End vacancy rate remained stable at 7.0% quarter-on-quarter, a wave of new completions this year, including Olympia (490,000 sq ft) and 1 Triton Square (180,000 sq ft), could temporarily increase availability. Between now and the end of 2028, 10.4 million sq ft is due to be delivered, with just 19% pre-let so far. However, the pipeline through to the end of 2026 looks tighter, with 35% already pre-let or under offer.
What This Means for Occupiers
The latest figures underline the growing importance of securing prime office space early, especially with development pipelines set to tighten. For businesses considering relocation, refurbishment, or tenant-ready™ solutions, now is the time to plan ahead. We combine three decades of design and build expertise with up-to-date London office market insight to help clients make informed decisions and create workspaces that support continued growth and employee performance.
This article is based on Savills’ Central London Office Market Watch, published on the 8th May 2025.