Insight 2:
Unlocking London: Shifting Behaviours, Emerging Opportunities
The dynamics of London’s office market will continue to evolve, shaped by shifting occupier priorities and a persistent supply-demand imbalance. While high-quality space will remain scarce, demand will become more refined as businesses reassess their real estate strategies. The indecision that followed the pandemic is giving way to greater (and necessary) conviction. Companies are recognising that they must act—either to secure the transformative space they need before it disappears or to rethink their workplace models in response to cost and operational pressures.
The dynamics of London’s office market will continue to evolve, shaped by shifting occupier priorities and a persistent supply-demand imbalance. While high-quality space will remain scarce, demand will become more refined as businesses reassess their real estate strategies. The indecision that followed the pandemic is giving way to greater (and necessary) conviction. Companies are recognising that they must act—either to secure the transformative space they need before it disappears or to rethink their workplace models in response to cost and operational pressures.
Occupiers Will Need to Act with Greater Conviction
The era of waiting and seeing is ending. The competition for best-in-class space will remain intense, and rising costs will drive more forensic scrutiny of real estate choices. As a result, occupiers will continue to adopt four distinct strategies, each balancing quality, flexibility, and financial discipline in different ways.
Pathway 1. A Flight (and Fight) for Quality
Pathway 2. Partnering to Pre-Let
Pathway 3. Renewing or Regearing for Stability
Pathway 4. Value-Oriented Moves
Four Occupier Pathways in 2025 and Beyond
Pathway 1. A Flight (and Fight) for Quality
Many occupiers will stay committed to securing top-tier office space, seeing it as integral to business transformation. The best buildings - those in prime locations, with strong amenities and high sustainability credentials - will command premium rents, and occupiers will be willing to pay. However, decision-making will become even more rigorous. Companies will optimize footprints, taking only what they truly need, and reassess which roles must be based in London. Supply conditions ensure that competition for quality space will intensify - what was once a "flight" will become a "fight" requiring occupiers to act decisively.
Pathway 2. Partnering to Pre-Let
With high-quality new space in short supply, pre-letting will become an increasingly attractive route for those set on quality. More occupiers - beyond just the largest corporations - will commit to developments ahead of completion, shaping buildings to fit their future needs. While this will require longer lead times and greater financial commitment, it will provide certainty in a constrained market. This approach will be especially critical in submarkets where supply remains tight, ensuring that forward-thinking occupiers secure the best space before competition heats up further.
Pathway 3. Renewing or Regearing for Stability
For many businesses, staying put will become the preferred choice. Limited supply, ongoing economic uncertainty, already high operating costs and the rising costs of relocation will see more occupiers negotiating lease renewals rather than moving. In response, landlords will need to enhance their offer, making targeted investments in building upgrades, amenities, and incentives to keep tenants in place. Where existing space meets operational needs, occupiers will opt for continuity over disruption. As a result, lease renewal activity will return toward long-term averages, moderating the recent surge in relocations.
Pathway 4. Value-Oriented Moves
Growing cost pressures will drive more occupiers to rethink their approach to space. Value focused occupiers will prioritise affordability over premium features, securing functional space at the best price—even if it means compromising on location, amenities, or building specifications. London’s new districts will attract more interest, while select secondary space in core markets will come into focus. The shift toward managed and serviced office solutions will also continue, with occupiers seeking to minimize capital expenditure while maintaining agility.
Market Implications: A More Segmented and Competitive Landscape
As these varied pathways take shape, London’s office market will become increasingly segmented. The most in-demand prime locations will continue to command record rents, driven by intense competition for limited space. Pre-letting will reshape the development landscape, with occupiers committing to projects years in advance. Lease renewals will gain momentum as businesses seek stability, while a growing focus on value will drive new demand into London’s new districts and repositioned secondary stock.
For occupiers, real estate decisions will require a sharper strategic focus - balancing aspirations for quality against financial realities, making long-term commitments where necessary, and seizing opportunities to optimize costs.
For landlords, the challenge will be clear: those who adapt to occupiers’ evolving needs will secure their position in an increasingly competitive market, while those who wait may be left behind.
Unlocking London’s Potential
Despite constraints and imbalances, London's office market will remain dynamic. While supply will continue to be tight, shifting occupier strategies will unlock opportunities across a broader spectrum of space grades and locations.
The market will no longer be defined by a simple "flight to quality" but by a more complex and competitive “fight for the right space.” Those who move decisively - whether upgrading, pre-letting, renewing, or seeking value - will be best positioned as the landscape evolves.
For occupiers, real estate decisions continue to be about more than just space - they will shape how companies support their people, adapt to new ways of working, and balance ambition with financial discipline. Some will commit to flagship spaces that support or embody business transformation; others will prioritize flexibility, efficiency, or stability.
For landlords, new market dynamics will require a new mindset, new attitude, and new approach. The best buildings will continue to attract top rents, but demand will broaden beyond the traditional core and beyond prime. Renewal discussions will become more strategic, with the cost of moving versus staying creating new opportunities in lease negotiations.
Market Implications: A More Segmented and Competitive Landscape
As these varied pathways take shape, London’s office market will become increasingly segmented. The most in-demand prime locations will continue to command record rents, driven by intense competition for limited space. Pre-letting will reshape the development landscape, with occupiers committing to projects years in advance. Lease renewals will gain momentum as businesses seek stability, while a growing focus on value will drive new demand into London’s new districts and repositioned secondary stock.
For occupiers, real estate decisions will require a sharper strategic focus - balancing aspirations for quality against financial realities, making long-term commitments where necessary, and seizing opportunities to optimize costs.
For landlords, the challenge will be clear: those who adapt to occupiers’ evolving needs will secure their position in an increasingly competitive market, while those who wait may be left behind.
Unlocking London’s Potential
Despite constraints and imbalances, London's office market will remain dynamic. While supply will continue to be tight, shifting occupier strategies will unlock opportunities across a broader spectrum of space grades and locations.
The market will no longer be defined by a simple "flight to quality" but by a more complex and competitive “fight for the right space.” Those who move decisively - whether upgrading, pre-letting, renewing, or seeking value - will be best positioned as the landscape evolves.
For occupiers, real estate decisions continue to be about more than just space - they will shape how companies support their people, adapt to new ways of working, and balance ambition with financial discipline. Some will commit to flagship spaces that support or embody business transformation; others will prioritize flexibility, efficiency, or stability.
For landlords, new market dynamics will require a new mindset, new attitude, and new approach. The best buildings will continue to attract top rents, but demand will broaden beyond the traditional core and beyond prime. Renewal discussions will become more strategic, with the cost of moving versus staying creating new opportunities in lease negotiations.
As the market evolves, landlords who succeed will embody four key principles:
- Be Creative. The old deal structures will no longer apply. New routes will emerge - those who find them first will move ahead.
- Be Clear. Precision will matter. Understanding the nuances of the market and the mindset of the occupier, and acting decisively, will separate those who secure deals from those who miss out.
- Be Bold. The cost of moving versus staying will reshape negotiations. Those who use this arbitrage to their advantage can create real value.
- Be Realistic. The market will be solid, not spectacular. Waiting for the perfect deal or for that large major occupier to ride in over the horizon will mean missing what’s achievable now.
London’s office market will not stand still. Those who recognise where the momentum is heading - and move with confidence - will be the ones who shape its future.
As the market evolves, landlords who succeed will embody four key principles:
- Be Creative. The old deal structures will no longer apply. New routes will emerge - those who find them first will move ahead.
- Be Clear. Precision will matter. Understanding the nuances of the market and the mindset of the occupier, and acting decisively, will separate those who secure deals from those who miss out.
- Be Bold. The cost of moving versus staying will reshape negotiations. Those who use this arbitrage to their advantage can create real value.
- Be Realistic. The market will be solid, not spectacular. Waiting for the perfect deal or for that large major occupier to ride in over the horizon will mean missing what’s achievable now.
London’s office market will not stand still. Those who recognise where the momentum is heading - and move with confidence - will be the ones who shape its future.
“ The post-Covid period has seen the market diverge from traditional norms, driven by profound structural changes and broader economic uncertainty, with an associated recalibration of market metrics.”
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