Central London Office Market Snapshot Q4 2025: A Year of Recalibration
Devono’s Q4 2025 Central London Office Market Snapshot reflects a market that has moved from recovery into structural adjustment.
Leasing activity softened over the year, with 11.4 million sq ft transacted, down 11% on 2024. However, the headline decline masks a more nuanced shift. Deal numbers reduced, but average deal size rose to 7,357 sq ft, the highest since 2019. Fewer transactions, but bigger and more deliberate decisions, defined 2025.
Supply is tightening, but selectively
Total availability ended the year at 22.5 million sq ft, down 11% year on year and at its lowest level since 2022. The contraction has been most evident in core financial markets, with availability in the City falling by 15% over the year.
Grade A supply continues to narrow. Larger floorplates above 100,000 sq ft reduced materially, and choice in several key size bands is becoming more constrained. While overall availability remains elevated by historic standards, matching size, quality and timing is increasingly complex.
Rents reset at a higher baseline
Prime Grade A rents across Central London now average £88.90 per sq ft, around 30% higher than five years ago. Although rental growth moderated in core markets towards year-end, affordability pressures remain acute. Incentives and pricing outcomes are increasingly building specific, placing greater emphasis on negotiation and early engagement.
Flexible workspace gains strategic weight
Serviced office providers leased more space in 2025, despite fewer new entrants. The shift towards larger centres and management agreements highlights a maturing market. At the same time, upcoming business rates changes are likely to reshape operating models and pricing structures through 2026.
Outlook: planning becomes the differentiator
Looking ahead, leasing activity is expected to regain momentum in early 2026. However, the market will reward preparation over reaction. A tighter supply pipeline, higher rental baselines and structural cost pressures mean occupiers will need clearer briefs, earlier engagement and more flexible location strategies.
The Q4 2025 Snapshot sets out these dynamics in detail, providing data and insight to inform workplace strategy for the year ahead.
