London's office market has reached a significant inflection point, with vacancy rates falling for the first time since the onset of hybrid working in 2022. Data from CBRE shows that the overall vacancy rate across central London dropped to 8.4 per cent in Q1 2026, down from a peak of 9.1 per cent last summer.
The City of London led the recovery, with Grade A availability falling sharply as financial services firms expanded their footprints. Goldman Sachs recently committed to an additional 85,000 square feet at its Plumtree Court headquarters, while Clifford Chance expanded its Canary Wharf presence by 40,000 square feet.
The flight to quality has been the defining theme of the post-pandemic office market. Occupiers are increasingly concentrated in modern, well-amenitised buildings with strong sustainability credentials, while older stock struggles to find tenants. Prime rents have reached £130 per square foot for the best West End addresses — a record high.
For investors, office values have stabilised after falls of 15-20 per cent from their 2022 peaks. Capital values for prime City offices rose 1.2 per cent in Q1, marking the first positive quarter in three years. However, the structural challenges facing secondary stock remain acute.
