Central London is witnessing a sharp surge in office rental values, with some areas experiencing increases of up to 8%. At a time when parts of the UK’s commercial sector remain cautious, the capital’s core is proving remarkably resilient. Rising demand, shrinking availability, and a renewed emphasis on high-quality workspace are all contributing to the uptick.
But what’s behind this trend—and what does it mean for businesses and landlords navigating the market in 2025?
The numbers behind the surge
Office rents across Central London are climbing steadily. Prime locations—such as Mayfair, Soho, and parts of the City—have seen rental growth of 6% to 8% over the past 12 months.
West End offices, long regarded as premium assets, have led the charge. In core locations, headline rents now exceed £140 per square foot, especially in top-tier buildings offering the latest amenities. Meanwhile, offices in the City and Midtown aren’t far behind, with a clear premium placed on sustainability credentials, fit-out quality, and wellness-focused design.
This growth is even more remarkable considering the broader economic backdrop. While inflation has eased slightly and interest rates remain high, demand for well-located, high-spec office space continues to outpace supply.
What’s driving the spike in rental values?
- Flight to quality
Occupiers are becoming more selective. Hybrid working has changed how space is used, but it hasn’t reduced the need for inspiring, collaborative environments. Rather than downsizing into basic offices, many firms are opting for better buildings, not just smaller ones.
This “flight to quality” has created intense competition for modern, Grade A space in prime Central London locations. Businesses want buildings that support employee wellbeing, meet green standards, and reflect their brand identity. As a result, properties that tick all those boxes are commanding record rents.
- Limited supply of top-tier stock
London’s pipeline of new office developments remains tight. While refurbishments are booming, new-build completions are lagging, particularly in the West End and City core.
Some developers have delayed or scaled back projects due to rising construction costs, planning hurdles, or environmental concerns. That’s created a bottleneck: fewer high-quality buildings coming to market, while tenant demand grows.
This imbalance between supply and demand is pushing up rents—especially in buildings ready for immediate occupation.
- Strong recovery in professional services and finance
Key sectors such as legal, tech, finance, and asset management are showing strong hiring activity and revenue growth. These companies are back in the market and looking to secure offices that will retain talent and support culture.
In particular, the financial and legal sectors are once again competing for trophy buildings in Mayfair and St James’s. This return to traditional hubs has reignited demand and led to bidding wars on some high-profile addresses.
Who’s taking space in Central London?
The tenant profile in Central London is evolving. While large corporates continue to anchor big buildings, there’s increasing activity from:
- Boutique financial firms
- Creative and media companies
- Flexible workspace operators
- Overseas businesses opening UK branches
Many of these occupiers are targeting high-visibility locations to support recruitment and client engagement. And despite higher rents, they view quality workspace as a strategic investment, not a cost.
There’s also been renewed interest from North American and European firms entering or expanding in the London market, encouraged by the pound’s relative weakness and the capital’s global status.
Rents are rising—but only in the right buildings
It’s important to note that not all office stock is benefiting equally. The rise in rental values is largely concentrated in Grade A and best-in-class refurbished buildings.
Secondary and lower-quality buildings are struggling to attract tenants unless they’re offered at a steep discount—or fully upgraded. Occupiers are less willing to compromise, particularly with more emphasis now placed on sustainability, EPC ratings, air quality, and natural light.
This growing bifurcation in the market means landlords with underperforming assets must invest or risk prolonged voids.
The role of sustainability in rental growth
Green credentials are no longer a “nice to have”—they’re essential.
Occupiers are demanding buildings with BREEAM Excellent, WELL certification, and EPC ratings of B or higher. These buildings not only reduce energy bills, but they also help tenants meet their own ESG goals.
Tenants are increasingly factoring carbon footprint into leasing decisions. That’s driving a premium for sustainable offices and penalising properties that haven’t been brought up to modern environmental standards.
This shift is putting further upward pressure on rents in eco-friendly buildings, which are in shorter supply across the capital.
Flexibility and the return of the long lease
Another notable trend in 2025 is the return of longer leases—at least for the right property.
While flexible work arrangements remain, many occupiers now want a balance: a stable home for their operations with break clauses and expansion options, but also a premium address and permanence.
Some landlords are offering creative incentives, such as fitted space, short-form leases with extension rights, or rolling fit-out contributions. But for high-demand properties in central zones, it’s often the landlord setting the terms.
As a result, leasing activity is rebounding in terms of volume and length—especially for buildings with flexible layouts and strong branding potential.
What does this mean for landlords and tenants?
For landlords:
Premium fit-outs pay off: Landlords investing in CAT A+ space or tenant-ready options are seeing stronger uptake and higher rents.
Sustainability is a deal-maker: Green buildings attract better tenants and secure longer leases.
Vacant legacy space must evolve: Secondary stock risks becoming stranded unless refurbished or repositioned.
For tenants:
Act early: Quality space is going fast. Companies leaving decisions late may be left with less choice and higher costs.
Prioritise employee experience: The office must be a destination worth commuting to.
Expect tighter negotiation room: In the best buildings, asking rents are holding firm—or increasing.
Searching for value: where opportunities remain
For businesses still looking for commercial property to rent in London, not all is lost. While prime rents are surging, there are still pockets of value—particularly:
- In fringe locations like Clerkenwell, Aldgate or Hammersmith
- In refurbished heritage buildings offering charm and flexibility
- In upcoming regeneration zones, where rental growth is yet to peak
Those willing to move slightly outside core postcodes or embrace non-traditional spaces can still find competitively priced options—particularly with the right agency guidance.
Final thoughts
The surge in Central London office rents signals a clear vote of confidence in the capital’s long-term appeal. Tenants are back, and they’re seeking more than just square footage—they want quality, identity, and sustainability.
With headline rents rising up to 8% in key zones, it’s a landlord’s market for best-in-class buildings. But for landlords with outdated stock, now is the time to invest—or risk falling behind.
For tenants, securing the right space means moving fast, budgeting smart, and prioritising long-term value over short-term savings.
London’s office market has evolved. And in 2025, quality really is king.
