Despite global events, Central London demand has remained strong in 2026, with 2.4 million sq ft let across 192 deals. Although Q2 26 take-up was 13% below Q2 2025, it was still 9% above the ten-year average – signalling occupier confidence in the sector and their expansion plans. In addition, Central London is clearly seeing a sustained preference for best-in-class assets as Grade A offices remain the most sought-after, having accounted for 94% of H1 take-up, leaving little doubt that specification, rather than availability alone, determines whether a scheme lets.

What is also clear is that this demand is being priced in. BREEAM Excellent and Outstanding buildings accounted for 65% of space leased in H1 and these buildings command rents 39% higher in the City and 49% higher in the West End than non-rated stock.

The premium is compounding against a market where rental growth continues to strengthen. City prime rents reached a record £116.73 per sq ft, up 19% year-on-year, and West End prime rents rose to £175.10 per sq ft, while City Grade A rents increased by 7% and West End Grade A rents passed £100 per sq ft for the first time. Grade B rents, by contrast, continue to decline as older buildings require significant investment to remain competitive, harming development viability further.

Development activity has continued in H1 2026, with 2.8 million sq ft of new space completed, 11% above the ten-year average, and total completions for the year forecast to reach a record 7.7 million sq ft. That volume would ordinarily loosen the market. It has not, as strong occupier demand has moderated the impact on available supply, with 35% of H2 deliveries already pre-let. With 16.1 million sq ft still under construction, near-term delivery remains substantial, and the willingness to build speculatively at this scale reflects genuine confidence in demand for prime office space.

That confidence contrasts sharply with a decline in new development starts, driven by construction cost inflation, labour and MEP shortages, tighter compliance requirements and geopolitical uncertainty. Around 22 million sq ft is expected to be completed by the end of 2029 across 148 schemes, although over a quarter of this future supply has yet to commence construction and remains at risk of delay or cancellation.

Pre-letting across the future pipeline stands at 18%, below historical averages, indicating that more planned space is still seeking occupier commitment. The market therefore presents a paradox: demand for prime space is proven, and rents are rising, yet the cost of delivering it is deferring the decisions needed to meet that demand. For developers able to budget realistically and carry genuine contingency, a thinning pipeline is as much an opportunity as a risk.

_{Read the articles within Savills Build: Perspective report below}