Central London office take-up totalled 1.9m sq ft in Q1 2026, 23% below the 10-year quarterly average reflecting the ongoing caution displayed by occupiers against a backdrop of economic and geopolitical uncertainty. This was evident in a fallback in occupier commitment to larger floorplates over the quarter, though a modest uptick in activity among smaller size bands demonstrated that demand among SME’s is improving.
The quarter's standout transaction saw energy firm BP commit to the entirety of the 191,000 sq ft Ink Building in Southwark, consolidating operations from locations in Surrey and St James's. Demand for larger floorplates was otherwise concentrated at recently completed buildings in the West End, where AI firm Databricks took the whole of the 139,000 sq ft Network Building in Fitzrovia, and Formula One acquiring 98,000 sq ft at 40 Broadway in Westminster in its entirety, underlining the ever-present occupier appetite for new and nascent stock.
The TMT & Creative sector accounted for the majority of demand in Q1 taking a 28% share. We expect to see the sector dominate this year with nearly 250,000 sq ft of space taken by AI firms Anthropic and OpenAI in April alone.
Central London vacancy fell 38 basis points to 6.3%, driven by a fall in Grade A supply, as take-up continues to outpace new completions. Indeed, only 35% of space completed over the quarter was available, further evidencing strong occupier demand for new office developments. Notable completions included the 292,000 sq ft refurbishment of Peterborough Court in Holborn, part-let to several firms including Morgan Lewis, and the 195,000 sq ft 100 New Bridge Street, pre-let to State Street.
Prime rents increased slightly across a handful of Central London submarkets, with the greatest growth recorded in Fitzrovia and Southwark. Further short-term increases are anticipated, as persistent demand for recently completed prime space continues to erode Grade A supply. This is particularly for buildings offering strong public transport connectivity, efficient operational costs, and best-in-class ESG credentials, especially as energy costs are expected to rise in the coming months.