UK Office Market Trends

What commercial Landlords should know

Central London office availability has fallen to its lowest level since 2022. For landlords with a lease event on the horizon, that single fact changes the conversation.

Here’s what’s happening across the market this year, and what each shift means for your portfolio.

Vacancy is Tightening Across Central London

Central London vacancy sits at 7.6%, but core submarkets are considerably tighter. King’s Cross and Euston are down to 3.0%, the lowest of any submarket, and the West End Core stands at 5.8%.

What this means for landlords: Fewer alternatives for occupiers means less pressure to compete on incentives. If your asset sits in or near one of the tighter submarkets, this is the moment to hold firm on rent-free periods and other concessions at the next renewal or rent review, rather than defaulting to last year’s terms.

Grade A is Absorbing Nearly All the Demand

Grade A space now accounts for 76% of all Central London leasing activity, up from 74% in 2025 and well above the ten-year average of 62%.

What this means for landlords: Occupiers are paying an increasing premium for quality. Well-maintained Grade A assets are well positioned to secure stronger terms this year. We will address implications for secondary and older stock in a separate article.

Prime Rents are Climbing

City prime rents reached £101.67 per sq ft, a rise of 4.9% year-on-year. West End Core rents hit £185 per sq ft.

What this means for landlords: Rent reviews and renewals due this year should be benchmarked against current prime figures, not the comparables used at the last review. Landlords relying on older evidence risk under-pricing at exactly the point the market has moved in their favour.

Speculative Supply isn’t Keeping Pace With Demand

Only 240,000 sq ft of new speculative space reached the market last quarter, well short of what occupiers are looking for.

What this means for landlords: Limited new supply extends the window in which existing quality stock has the upper hand. If a refurbishment or repositioning is planned, timing it to land while this gap persists will make a meaningful difference to how quickly the space lets and at what rent.

AI and Technology Occupiers are Reshaping Demand

AI and technology occupiers now account for 19% of all Central London space taken, concentrated in King’s Cross, Euston, Fitzrovia and Soho.

What this means for landlords: If your asset sits in one of these submarkets, marketing and fit-out decisions should reflect what this occupier group is actually looking for, rather than a generic office specification. Landlords outside these pockets should still watch the trend, since it tends to spread to adjacent submarkets as availability tightens further.

The Rules Around Renewal Have Changed Too

The upward-only rent review ban is now law, removing a mechanism landlords have relied on for decades at review.

What this means for landlords: Every renewal in the pipeline needs a fresh structural review rather than a repeat of the previous lease. Landlords who plan ahead of a review date, rather than reacting to it, are better placed to protect asset value under the new rules.

How Papilio is Helping Landlords Respond

Recent work reflects exactly this shift toward proactive, data-led management.

  • We prepared and completed the sale of an investment building in Soho, managing the asset through to a successful disposal.
  • We delivered compliance and facilities management for newly onboarded buildings, bringing each asset up to full standard from day one.

Both outcomes came from the same approach: understanding the asset thoroughly, addressing issues early, and giving the client full visibility throughout.

Speak to Our Team

Supply is tight, rents are rising, and the rules around renewal have changed. That’s a favourable backdrop for landlords, but only if you’re working from current data rather than last year’s assumptions.

If you have a lease event, rent review or disposal on the horizon in the next 12 months, get in touch with Papilio to talk through your portfolio’s leasing strategy.