Central London office demand rises as expansions hit six-year high

Demand for larger office space defined Central London's occupier market in 2025, as businesses pursued expansion despite a more selective leasing environment, according to Cushman & Wakefield's annual London Moves report.

The report analysed every office leasing transaction above 5,000 square feet in Central London during 2025 — 504 deals totalling 9.6 million square feet. Overall transaction volumes fell modestly from 531 deals in 2024, primarily owing to fewer transactions below 50,000 square feet.

Deals above 100,000 square feet rose from eight in 2024 to 12 in 2025, with 11 of those involving occupiers expanding their footprint. Net expansion across the market reached 3.82 million square feet — the highest since 2019 and the sixth consecutive year of expansion in Central London.

"Occupiers with growth agendas are making decisive, long term commitments to high quality buildings in core locations," said Alistair Brown (pictured right), head of offices UK at Cushman & Wakefield. "The scale of expansion we are seeing signals accelerating confidence in the office as a catalyst for productivity, culture and business growth."

Professional services was the most active sector, recording 85 moves totalling 1.36 million square feet, including FTI's 103,000 square feet pre-let at 1 Exchange Square in the City Core. Banking and finance followed closely with 84 relocations totalling 2.55 million square feet, four of which exceeded 100,000 square feet. The largest single deal of the year was Squarepoint's 404,000 square feet pre-let at 65 Gresham Street.

Net office expansion in Central London  Source: Cushman & Wakefield 

Core markets hold firm

Of the 296 occupiers that relocated within Central London in 2025, the city accounted for 59% of all leasing activity (197 transactions). The West End recorded 93 transactions despite constrained availability, with sustained interest in Mayfair and St James's.

East London was a standout, with deal volumes tripling year-on-year and take-up exceeding 1.1 million square feet — its strongest post-pandemic performance. Activity in Canary Wharf was bolstered by the Elizabeth line's transport connectivity.

Occupiers also showed greater loyalty to their existing locations. The average distance moved fell to a record low of 0.65 miles, with more than 60% of relocations taking place within half a mile of the previous office, compared with an average of 46% in the five years prior to the pandemic.

Supply constraints drive spillover activity

Tightening availability around Elizabeth line stations and major rail hubs is prompting occupiers to pursue renewals, regears, or moves into adjacent submarkets. Southbank was the primary beneficiary in 2025, with 29 transactions recorded following relocations by Lego, PayPal and ServiceNow. Midtown and North of Oxford Street also attracted increased demand, with notable lettings including General Atlantic (50,000 square feet pre-let) and Generation Investment (58,500 square feet).

Cushman & Wakefield projects a 7.4 million square feet Grade A supply deficit by 2030 if current take-up trends persist, with the development pipeline remaining constrained.

AI firms accelerate demand

AI businesses are becoming a material source of office demand in Central London. In 2025, they accounted for 15% of technology sector take-up. Activity increased sharply in the first quarter of 2026, when AI occupiers transacted 230,000 square feet — representing 50% of all technology leasing activity and 12% of total Central London take-up. That included Databricks' announcement of a 137,000 square feet EMEA headquarters in Fitzrovia, quadrupling its London footprint.

Those figures were swiftly surpassed in April 2026 as Anthropic and OpenAI announced deals at One Triton Square and King's Cross respectively, totalling just under 250,000 square feet.

"AI businesses are driving strong near term demand and are proactively seeking the best buildings available," said James Campbell (pictured right), head of Central London offices leasing at Cushman & Wakefield. "This urgency is also creating a knock on effect, as those unable to secure their preferred space are moving quickly on to alternatives. Recent deals by Anthropic and Databricks, for example, displaced other occupiers and triggered a ripple effect across the market."

Cushman & Wakefield's analysis of 117 global businesses valued above $1 billion and 320 active venture-capital-backed UK AI firms suggests AI-driven demand remains at an early stage. The firm forecasts that the sector could generate approximately 3 million square feet of additional Central London demand over the next three years in the base case, and up to 6.4 million square feet in an upside scenario — sufficient to classify AI as a distinct market sector.

"The acceleration of AI demand in Central London adds a powerful new layer to an already supply constrained market," said Heena Gadhavi (pictured right), head of London offices research and insight at Cushman & Wakefield. "Even under our base case assumptions, AI occupiers alone have the potential to materially tighten availability in the most sought after parts of Central London.

"Against a backdrop of limited new development, this demand will play a growing role in reshaping the composition of active occupiers and sectors across the market. Whilst the forecasts look towards the next three years, the reality is that the demand from AI businesses is likely to continue beyond this period, as its relevance across all industries continues to grow." 

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