The office real estate market in London - statistics & facts

Along with New York, Hong Kong, and Singapore, London is one of the leading financial hubs worldwide. The megacity is the biggest contributor to the United Kingdom (UK) economy and its office real estate market is among of Europe's most active ones. Some of the key locations for office real estate are West End, the City of London, and Canary Wharf. The West End is known for being London’s commercial and entertainment center, as well as the most expensive place to rent office space. The City of London is the primary financial district and home to the London Stock Exchange and the headquarters of a number of banks, such as Bank of England, Barclays, HSBC, Lloyds, and many others. This makes the City of London the place to be for companies in the finance sector. With its iconic skyline of high-rise office buildings, Canary Wharf is another noteworthy location attracting both investors and occupiers. According to industry experts, London holds a leading position among top European cities by overall development and investment prospects.

The investment market on the path to recovery from the pandemic

Despite London being one of the top European markets for office real estate investment, the office sector was hit badly by the coronavirus (COVID-19) pandemic. Multiple lockdowns, travel restrictions due to the pandemic, and the adoption of more remote work for office workers, in combination with the effects of Brexit, are some of the main factors leading to a decreased investment and occupiers’ sentiment. Although investments fell significantly during the pandemic, the second half of 2021 and first half of 2022 saw a significant uptick, showing that despite the uncertainty ahead, recovery is on the way. In fact, net prime office yields contracted for the first time in 2021, after stalling for three years in a row.

Occupiers’ market waking up

Positive trends can also be observed in the occupiers’ market: Since the second half of 2021 Central London has experienced record high take-up. Take-up is an easy way to measure the demand for real estate and is calculated as the total amount of space that was transacted during a specific period, including space that was let, pre-let, sold, or pre-sold to owner-occupiers or tenants. Another indication that occupiers’ markets are recovering is rental growth: In 2022, rents increased, after stalling or slightly falling in 2021. Despite transactions and rents picking up, the vacancy rate of prime offices remained well above the pre-pandemic levels as of the last quarter of 2021. This applied not only to Central London as a whole but also to the main markets, including the City of London and West End.
This text provides general information. Statista assumes no liability for the information given being complete or correct. Due to varying update cycles, statistics can display more up-to-date data than referenced in the text.

Key insights

Vacancy rate of office real estate in London West End
6.8%
Prime office vacancy rate London
8.9%
Office real estate rental value growth forecast UK 2022-2026
1.6%
Get more insights

Editor’s Picks Current statistics on this topic

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Rental growth forecast for different commercial property types in the UK 2022-2026

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