City Office Leasing

Overview

The City market has remained resilient in Q2 2025 with 1.4M sq ft of leasing activity having taken place, which aligns with the long term average. Of this space, 80% of the take-up was of Grade A quality — the highest quarterly share on record, however mainly being driven once again by the pre-let market. This places the Grade A volume 40% above the 10-year quarterly average, reaching 1.12M sq ft.

A total of 50 deals were transacted in Q2, resulting in the highest average lot size on record at 28,000 sq ft. This was driven by several major pre-let transactions, most notably Squarepoint acquiring 400,000 sq ft at 65 Gresham Street, EC2 on an off-plan pre-let — the largest deal in Central London since HSBC’s pre-let of Panorama, EC1 in 2023. We anticipate Q3 2025 will see a drop in take up with such vast quantities of space having been removed from the market.

City prime rents have continued to grow across Q2 2025, having witnessed a further 2% increase since last quarter, now reaching to £93.50 per sq ft, up 2% from Q1 and 7% year-on-year. Best in class rents are now hitting £130 per sq ft plus on tower floors illustrating this growth. Despite economic 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.

Under offers declined to 1.1M sq ft at the end of Q2, representing a 31% decrease against the 10-year average and the lowest figure since 2016.

The scarcity of development continues to drive the flight to quality observed in recent quarters and therefore drives the pre-let market with a handful of major acquisitions in the past quarter. Completions in Q2 totalled 2.2M sq ft, with an impressive 90% pre-let. An additional 8M sq ft is under construction across the market, with 29% pre-let as of the end of Q2. Just over 50% of this pipeline is scheduled for completion in Q2 2025, leaving just over 4M sq ft being delivered between 2026 and 2030. With this in turn, we have continued to see re-gears dominate the market with 60% of those with requirements over 100,000 sq ft staying put in the last quarter due to the quality and quantum of space being unavailable within their time frames.

Given the continued occupier preference for best in class space, this points to a significant shortfall in the delivery of new stock over the medium term, which is likely to result in further erosion of Grade A supply over the following quarters.

Headline Market Deals

Key completions in Q2 2025 were Squarepoint’s off plan pre-let of 400,000 sq ft at 65 Gresham Street, EC2, State Street acquiring 195,000 sq ft at 100 New Bridge Street, EC4 for their own occupation, Lego acquiring 192,000 sq ft at 76 Southbank, SE1, London School of Economics and Politics taking 190,000 sq ft at Centrium, 61 Aldwych, WC2, and ISAM Funds acquiring 37,500 sq ft at 40 Leadenhall, EC3.

Allsop Transactions

The City leasing team continued a run of success in Q2 2025. Key completions have been the re-gear of 85,000 sq ft on behalf of Miller Insurance at 70 Mark Lane, EC3, acting for Sony Music UK to acquire 16,000 sq ft at BMO’s 98 Theobalds Road, WC1, Cleo acquiring 15,700 sq ft at Brookfield’s The Gilbert, EC2, The Investment Association acquiring 9,000 sq ft at CLI Dartriver’s The Folgate Building, E1, Gensler UK acquiring a further 8,000 sq ft at Resolution’s Moretown, E1. Duco Technology acquiring 7,000 sq ft at Dorrington’s Panagram, EC1 and Hamburg Commercial Bank acquiring 4,000 sq ft at Thor Limited’s 60 Moorgate, EC2.