The technology and creative sectors accounted for a 28% share of Central London office take-up in the first quarter of the year, according to the latest Central London Office Analysis from global commercial real estate advisor Avison Young.

With almost 250,000 sq ft of space taken by AI giants Anthropic and OpenAI in April alone, the firm predicts that these key sectors will continue to dominate the market in 2026, as rapid expansion across AI and related industries fuels ongoing demand for high-quality, centrally located workspace.

Take-up totalled 1.9m sq ft in Q1, sitting 23% below the 10-year quarterly average and reflecting the ongoing cautious sentiment from occupiers against a backdrop of economic and geopolitical uncertainty. The largest transaction was from BP, who committed to the 191,000 sq ft Ink Building in Southwark, consolidating operations from locations in Surrey and St James’s.

Demand for larger floorplates was concentrated on newer schemes, which included AI firm Databricks taking 139,000 sq ft at the Network Building in Fitzrovia, and Formula One acquiring 98,000 sq ft in Westminster.

A fall in Grade A supply meant that Central London vacancy fell to 6.3%, as take-up continued to outpace new completions. While only 35% of space completed over the quarter was available, notable completions include the refurbishment of Peterborough Court in Holborn, which is already part-let to several firms.

While Q1 investment volumes totalled £1.9bn, below longer term averages, 43 transactions were completed, including seven deals above £100m, reflecting an improved appetite for larger lot sizes, particularly amongst overseas investors. Asian investors accounted for a 25% share, driven by Japanese investor Daibiru Corporation acquiring a £300m stake in Mitsubishi’s Warwick Court and Indonesian developer Sinar Mas purchasing Burberry’s HQ, Horseferry House for £131.8m.

James Walker, Principal and Head of London Office Leasing at Avison Young, said:
“The Central London office market has an unrivalled status as a leading destination for occupiers and investors, and it’s encouraging to see occupier demand continue to grow, particularly across the tech and creative sectors, including AI, reinforcing London’s global appeal.

“Looking ahead, this sustained demand is expected to place further pressure on Grade A supply. As a result, buildings that can offer excellent public transport connectivity, efficient operational costs and best in class ESG credentials will be best positioned to capture occupier attention and outperform the wider market.”

Dominic Amey, Principal, London Investment at Avison Young, added:
“While inflation is expected to remain elevated, it’s encouraging to see confidence building across the investment market, particularly from overseas buyers. Asian capital continued to play a prominent role over the past quarter, underlining the attractiveness of Central London assets and the strength of international appetite for scale and quality.

“Although higher borrowing costs may keep some debt reliant investors on the sidelines in the near term, this is creating a more selective and disciplined market, with well positioned buyers actively deploying capital and setting a positive tone for activity ahead.”

Steven Mason, Principal and Managing Director, Building and Project Consultancy, London at Avison Young, added:
“Construction activity across Central London remains on a stable footing, with infrastructure output continuing to edge forward year on year. Material prices were largely steady through the second half of 2025, providing greater cost certainty for the market.

“While ongoing geopolitical uncertainty could introduce some upward pressure on prices, this environment is driving a measured and pragmatic approach to development. We expect tender prices to rise by 3.5% this year, reinforcing the importance of early planning and value led decision making as well positioned projects continue to progress across the City.”

Read Avison Young’s Central London Office Analysis for Q4 2025 in full here.