Colliers publishes Q1 London office review
London office take-up now 17% above the ten-year quarterly average.
21 July 2025
Figures show that office take-up across London reached 3.2 million sq ft – 17% above the ten-year quarterly average. It also represents a quarterly rise of 29%.
The growth has been generated in part by transactions over 100,000 sq ft. These include leases or purchases by large corporations including JP Morgan, Squarepoint, State Street Bank, MWE, Lego and the LSE. Colliers notes that this represents the largest number of deals of this size since the end of 2019.
Pre-letting activity has also surged to the highest for eighteen months – 65% above the ten year average. Grade A offices showed the most activity, equating to 81% of total transactions – supporting the industry-wide view that quality office space is drawing the most attention from the market right now.
Financial services continues to drive demand across London. Five of the ten largest deals in Q2 were with financial firms, but a further significant contribution was made by educational occupiers. Education providers leased or bought over 250,000 sf of accommodation in Q2. Rising demand, both domestic and overseas, plus capital investment in high-tech and niche education are key reasons for growth.
One outcome of this buoyant market is a squeeze on available office space. Colliers notes that five London sub-markets (Mayfair, St James’s, Soho, Marylebone and Farringdon) have vacancy below the ten year average. At the end of 2024, only Mayfair was experience this shortage of space.
Total office space under construction in London stands at 16.4 million sq ft of which 6.0 million (37%) is pre-let. In terms of speculative delivery, the remainder of 2025 will see just 2.8 million sf (27%) of the pipeline under construction with a further 37% (3.8 million sf) in 2026, 18% in 2027 and 18% in 2028-2029.
Partly as a result of this, commercial office rents are rising rapidly. Colliers research shows that average prime rents across London have grown by 5.3% over the past 12 months. 40% of London’s 25 submarkets saw a rise in the prime rent in Q2 2025 and over 75% have seen rents increase since the start of the year.