Demand for central London office space reaches record high

Active demand for office space in Central London has reached a record high, according to the latest data from real estate advisor Savills.

In the first quarter of 2026, 2.2 million sq ft of office leases were transacted in Central London, an increase of 6% over the same period last year.

Demand for space reached a record-breaking 14.6 million sq ft, which is a massive 57% above the 10-year average.

Those already occupying office space were optimistic about expansion, and all new demand recorded in the first quarter of 2026 was from occupiers seeking to expand their office space.

Along with demand, office rents in London have also reached a record high of £160 per sq ft, with the average prime rent in the City up 40% on the first quarter of last year.

“Momentum is continuing to build in the Central London office market, with more businesses looking to grow their space contributing to improved stats on last year,” said Savills Central London Agency Executive Director Philip Pearce.

“We’d expect to see more deals happening throughout the rest of the year as occupiers look to take high-quality space.”

Flexible office space is the new normal

When it comes to office space in Central London, landlords are betting big on flexible workspaces such as coworking or shared offices.

According to a recent survey by Orega, 81% of office landlords, advisers, and asset managers plan to further expand into flexible workspaces in the next three years.

One third said they currently held up to 50% of their total office space as flexible space, and 28% of those surveyed said they expected to increase their flexible office space significantly. Less than 3% said they expected to reduce their flexible office space.

The growth in flexible office space adoption was most apparent in London and Manchester, with 83% of those in Manchester and 84% of those in the capital targeting expansion.

Landlords cite a number of reasons as the biggest drivers towards the adoption of flexible office space, including attraction to occupiers, improving the occupier’s experience, and increasing revenue potential.

Orega said its data shows that flexible office spaces are beginning to be seen less as a hybrid working solution and more embedded as a core enabler for businesses.

It added that flexible office space also allows landlords to hedge against evolving market trends and uncertainty.

“Landlords and asset managers are recognising that occupiers want flexibility, operational simplicity and a high-quality experience, and flex delivers on all three,” said Orega CEO Alan Pepper.

“What is particularly striking is the shift from flex being a space-filling solution to a long-term occupier retention and asset enhancement strategy.”

“Flex is no longer cyclical or opportunistic—it has matured and is a structural part of the market. It is reshaping how landlords compete, how buildings are operated, and how occupiers engage with workspace,” he said.

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