City Leasing

Overview

Following a strong Q2 driven by several major pre-let transactions, most notably Squarepoint acquiring 400,000 sq ft at 65 Gresham Street, EC2, leasing activity in Q3 slowed with take up down 18% from the previous quarter to around 1.25M sq ft. Of this space, 57% of take-up over Q3 was for new or refurbished space, down significantly from the previous quarter where we witnessed take up for Grade A space closer to 80%. Take up in the City was primarily driven by the Insurance and Finance sectors accounting for 28%.

Vacancy rates in City tower space continue to sit below 1% whilst the wider City Core sits at just 4.3%, and the broader City market at 7.8% demonstrating the premium for best-in-class and newly refurbished assets. As best in class supply continues to diminish, we are starting to witness increasing traction in the City Fringe markets as occupiers are being forced to look further afield in order to acquire high quality office space. British Land’s Norton Folgate, E1 benefitted from this in the last quarter with 5 deals completing and a further 3 floors placed under offer.

City prime rents have continued to grow across Q3 2025 now reaching £94.50 per sq ft; a 1% increase since last quarter. Exceptionally low vacancy in tower space has led to new record rents being achieved with law firm Proskauer Rose acquiring additional space in 8 Bishopsgate, EC2 at a rent of £145 per sq ft. Despite economic and political uncertainties, the drive for best in class space has continued and we anticipate this upwards pressure on rents to continue through to the end of 2025 and beyond.

The development pipeline remains constrained by elevated financing costs, construction inflation, and planning challenges, with the supply-demand imbalance expected to persist through 2025, supporting continued rental growth for prime assets. At the end of Q3 2025, only 22 properties across Central London have over 100,000 sq ft of available ready to occupy space, 11 of these being newly developed buildings. This scarcity of development and opportunity for companies continues to drive the flight to quality observed in recent quarters and continues to drive the pre-let market with a handful of major acquisitions in the past quarter. We anticipate re-gears will continue to dominate the over 50,000 sq ft requirements as the available stock continues to diminish.

Headline Market Deals

Key completions in Q2 2025 were HSBC acquiring 200,000 sq ft at 40 Bank Street, E14, Bristows taking 68,000 sq ft at Bow Bells House, EC4, BMS Group acquiring 65,000 at The Gherkin, EC3, RWE Supply & Trading taking 55,000 sq ft at Northcliffe House, EC4, and MSCI acquiring 52,000 at Exchange House, EC2.

Allsop Transactions

The City leasing team continued a run of success in Q3 2025. A handful of key completions have been AMPA acquiring 12,000 sq ft from MPS in The Shard, SE1, Pure Data Centres Group acquiring 10,750 at British Land’s Blossom Yard, E1, GLAS acquiring 10,500 sq ft and Prudential taking 9,400 sq ft at Longmead Capital’s 10 Old Bailey, EC4, acting for Miller Insurance to acquire 10,000 sq ft at 70 Mark Lane, EC3, Vollebak acquiring 6,000 sq ft at Workspace’s The Centro Buildings, NW1, Push Gaming acquiring 3,800 sq ft at Rocket Investment’s 10 East Road, N1, and Simple Human taking 2,600 sq ft at British Land’s 15 Norton Folgate, E1.