C&W: office leasing deals, new record for the City of London

Office leasing deals in the City of London reached a new record in 2024 as occupiers focus on “more and better” space in the most popular location, according to new research by Cushman & Wakefield.

“The City triumphs as the most attractive location in London for office space right now,” said Ben Cullen, head of UK offices, Cushman & Wakefield. “Its supply of top quality space, access to amenities and unrivalled connectivity works for people across the workforce and therefore the competition for space is intense.”

A record 339 office leasing transactions over 5,000 sq ft (464.5 sq m) deals were recorded last year in the City, out of a total of 531 across Central London. The total is 17% higher than the ten-year average and it surpassed the previous high of 331 – achieved in 2015, 2018 and 2023 – as occupiers doubled down on the City as their most popular choice for office accommodation in Central London, accounting for 64% of the overall transaction volume.

The focus on quality seen in the last few years continues: 65% of office space leased in 2024 was of grade-A quality. But contrary to the trend for scaling back seen after Covid, occupiers have actually increased their floorspace by 38% on average, a net market growth of 3.27 million sq ft (303,790 sq m), the highest net expansion figure since 2019. This “indicates an uptick in confidence in the role of office space since the pandemic,” according to Cushman & Wakefield’s annual ‘London Moves’ report. 

The West End also continued to attract significant interest, though slightly down on 2023 (-4%), with 183 office leasing transactions. “Supply shortages emerging across the core West End markets have constrained transactions to a degree, but nonetheless occupiers continue to be keenly focused in these locations,” said Cullen. “As a result, rents have pushed to new highs and are expected to continue to rise further.”

Strong rental growth was recorded across Central London in 2024, particularly in central locations, reaching 12% in the City Core and 9% in Mayfair & St James’s.​ Comparing headline rents at the start of the new lease with that of start of the former lease, across the top 10 largest office transactions in 2024 there was an average increase of 73% in total rent liabilities on an annualised basis.​ ​

“Today, the flight to centrality for investors, occupiers and developers alike is clearly visible”, said Kiran Patel, Head of London Office Research, Cushman & Wakefield. “We are witnessing activity shrinking away from the edge and clustering around core locations and thus concentrating areas of strong rental prospects and declining vacancy rates.”