Central London office investment rises 9% year-on-year to £6.2bn

Central London’s office investment market is showing signs of renewed investor confidence, according to new analysis from global commercial real estate advisor Avison Young, with year-to-date transaction volumes reaching £6.2bn, up 9% on the £5.7bn recorded over the same period in 2025.

Transaction volumes in Q3 2026 reached £2.3bn, representing the strongest quarter of the year. 61 deals completed during Q3, the highest level seen since the final quarter of 2018, supported by Brookfield and the Qatar Investment Authority’s acquisition of One Bank Street for £625m.

Other big-ticket transactions for the quarter included KKCG Real Estate inking a deal for 1 St James’s Square for £291m and SevenCitiesLdn purchasing 123 Victoria Street for £211m.

While office leasing activity across Central London remained selective, reaching 2.3m sq ft, certain submarkets underpinned activity. In the City Core, take-up hit 1.1m sq ft, 22% above the 10-year quarterly average, with financial services accounting for 61% of take-up. This was driven by the largest City deal since 2023, as Jane Street pre-let 470,000 sq ft at One Spitalfields.

Take-up in Southbank was double that of Q2, reaching 146,000 sq ft, driven by an increase in demand for small-to-medium sized floorplates. The biggest deals of the quarter saw BII taking 44,000 sq ft at 6 More London and Beyond signing for 32,000 sq ft at 30-34 Old Paradise Street.

Vacancy rose from 6.3% to 6.7% across Central London, influenced by a rise in Grade A vacancy which increased to 2.1%. The greatest increase was seen in West London, where vacancy now stands at 13.9%, following the completion of the 600,000 sq ft Hammersmith Olympia scheme.

London’s flexible workspace market also gained momentum over the summer, with Q3 lead flow running 28% higher than the same period last year. The City Core submarkets of Moorgate and Liverpool Street showed particularly strong performance, with enquiries up 88% and 62% year-on-year, respectively.

Fergus Keane, Principal, London Office Investment at Avison Young, said:
"The investment market continues to build momentum, with growing conviction among buyers, particularly from North America, Europe and Asia, and this year, we’ve seen a number of large-scale transactions closing, a clear indicator of improving liquidity and investor confidence in London’s office market.

“That being said, capital still remains highly selective, and investors are focusing on assets with strong occupational fundamentals, secure income and clear rental growth potential. While confidence is improving, the macroeconomic backdrop continues to temper sentiment and many investors are acting with a degree of caution. Nevertheless, London remains one of the world's most attractive destinations for real estate capital, underlined by some of the significant deals we’ve seen in the last quarter.”

James Walker, Principal and Head of London Office Leasing at Avison Young, added:
"While occupier activity remains selective, there is no shortage of demand for the best space in the right locations. The strength of take-up in the City Core, alongside the significant pre-letting activity we have seen so far this year, demonstrates that businesses continue to prioritise high-quality workspace that supports talent attraction, drives productivity and enables their growth.

"But the market does remain polarised. Well-located, best-in-class buildings with a strong amenity offer are outperforming, while older stock faces increasing pressure. That trend is likely to continue as occupiers focus on quality, flexibility and sustainability. With more than 650,000 sq ft of speculative space due to complete in early 2027 in the City Core, the market will provide a real test of how quickly the next wave of high-quality supply is absorbed."

Alex Gathercole, Director, London Flex Advisory at Avison Young, added:
"Flexible workspace is increasingly embedded within London's office market, rather than operating as a niche alternative, as occupiers continue to value agility in their workspace strategies. Demand remains strongest in the City Core, although the availability of suitable space is becoming a growing challenge for operators looking to expand.

"With flexible workspace now accounting for around 10% of London's total office stock, its role within the market will continue to grow. By 2030, we estimate that flex will account for around 15% of stock, driven by the continued expansion of ‘brandlord’ space and managed solutions, reflecting the increasingly central role flexible workspace is playing in occupier strategies across the capital."

Read Avison Young’s Central London Office Analysis for Q3 2026 in full here.