Occupier Analysis Q2 2026

Central London office take-up totalled 2.6m sq ft in Q2 2026, 6% greater than the 10-year average, representing the strongest quarter for take-up in a year. This occurred despite ongoing economic and political uncertainty, which has previously weighed on the London office market with occupiers demonstrating greater resilience in Q2. A notable feature of the quarter was an increase in larger transactions, with the number of deals exceeding 50,000 sq ft rising 50% above the post-COVID average.
 
The defining theme of the Central London office market in Q2 was the dominance of AI firms, with AI sector take-up totaling approximately 500,000 sq ft. This brought AI sector take-up in London at the half-year stage to 700,000 sq ft, highlighting London’s growing prominence as a centre of AI activity. In Q2, AI-related take-up was largely concentrated in the King’s Cross / Euston area, which is now an established tech hub following the completion of Google’s 860,000 sq ft headquarters in Q2. Notable deals in this area over the quarter included Anthropic’s 158,000 sq ft and Humanoid’s 42,000 sq ft lettings at 1 Triton Court, alongside OpenAI’s pre-letting of the entirety of Jahn Court which is due for completion in late 2026.
 
Office vacancy across Central London remained unchanged at 6.3% during Q2, sitting at its lowest level since the COVID-19 pandemic. This was despite vacancy movement across the submarkets, with Midtown vacancy falling 60 basis points to 4.3% to sit as the lowest in London. Despite overall vacancy remaining stable, Grade A vacancy rose 40 bps to 1.9% following the release of newly marketed space, particularly in East London and Southbank. Despite this, Grade A vacancy remains low in a handful of key markets, now standing at just 1.3% in both the West End and the City.
 
Prime rents increased across a handful of markets over Q2, with Central London prime rental growth reaching 6.5% between Q2 2025 and Q2 2026. The strongest rental growth during the quarter was recorded in Mayfair, St James's and Canary Wharf. Further short-term rental growth is anticipated as Grade A vacancy remains constrained across many London submarkets, while occupier demand continues to favour buildings with strong public transport connectivity, efficient operating costs and best-in-class ESG credentials.