![\"London](\"https:\/\/www.europesays.com\/britain\/wp-content\/uploads\/2026\/04\/London-office-workers-AI-and-tech-e1771240954549.jpg\")
\t\tDemand for central London offices has overtaken the capital’s fringes\t<\/p>\n\t\t\tThursday 09 April 2026 2:35 pm\n\t\t\t<\/p>\n
\t\tDemand for central London offices has overtaken the capital’s fringes\t<\/p>\n
The demand for central London office<\/a> space is soaring while vacant buildings are piling up on the fringes of the capital.<\/p>\n The vacancy rate \u2013 which is a key indicator of demand \u2013 of central London offices has fallen to its lowest level in this decade as occupiers target prime locations like the City and the West End<\/a>, according to data shared exclusively with City AM.<\/p>\n The vanishingly low rate of spare office space in central London means companies are having to fork out eye-watering rents but has driven soaring demand, in good news for developers and investors.<\/p>\n The vacancy rate of central offices has fallen to 11.5 per cent, according to real estate information firm CoStar, while the proportion of spare office space in fringe London has climbed to 37 per cent.\u00a0<\/p>\n This leaves the gulf between central and fringe vacancy rates at its widest \u2013 more than 2,500 basis points \u2013 in this decade.\u00a0<\/p>\n \t\tCentral London offices become invaluable<\/p>\n There were more vacant offices in outer London than in the city\u2019s core in 2020 but this trend has been reversing since 2023, when the vacancy rates in the two areas were at the same level.<\/p>\n The north and east of the Square Mile<\/a>, as well as Mayfair and Marylebone, are the most in-demand areas of central London, according to CoStar.<\/p>\n Patrick Scanlon, senior director of analytics at CoStar, told City AM: \u201cThe falling vacancy rates for Central London offices suggest that demand for space has strengthened since the pandemic.<\/p>\n \t\t\t\t\tRead more<\/p>\n \t\t\tLondon developers call for emergency measures in office space squeeze<\/a><\/p>\n \u201cOccupiers are focused on securing their preferred options in Central London, in locations where they can find the best connectivity and amenity.\u201d<\/p>\n The revival of the Docklands area was a key contributor to the resurgence of central London\u2019s office landscape last year, which saw major leasing deals signed for firms including Visa and HSBC.<\/p>\n Hammersmith, the outer edge of London\u2019s East End and Hounslow are among the worst-performing areas for office space in the capital, CoStar found.<\/p>\n Low office vacancy \u2018could constrain growth\u2019<\/p>\n London is leading the global race for direct investment but the UK\u2019s largest developers have warned plummeting vacancy rates could mean the capital could run out of space.<\/p>\n The London Property Alliance (LPA) last month called<\/a> for the government to designate offices in the capital as critical economic infrastructure, amid fears a lack of office space could \u201cconstrain\u201d growth.<\/p>\n Alexander Jan, chief economic adviser at the LPA<\/a>, told City AM: \u201cIf London is to turn its global investment lead into jobs and growth, it needs a sustained pipeline of high quality office space in the West End. Without that, the capital risks constraining its own success.\u201d<\/p>\n The cost of building skyscrapers in London has soared<\/a> by 40 per cent in five years as pressure on the capital\u2019s high-rise property market mounts, according to professional services firm Turner & Townsend.<\/p>\n \t\t\t\t\tRead more<\/p>\n