BNP Paribas Real Estate’s first-quarter figures show the City and West End moving in opposite directions, with prime rents still rising
Central London Offices: 2.5 Million Square Feet Let and a Vacancy Rate That Has Not Panicked
BNP Paribas Real Estate’s first-quarter figures show the City and West End moving in opposite directions, with prime rents still rising
By Chelsea Bloom, business and politics correspondent, North London
The Quarter
Central London office take-up in the first quarter of 2026 was 2.5 million square feet, down 12.5 percent on the previous quarter and 19.7 percent on a year earlier, according to BNP Paribas Real Estate. The five-year quarterly average is 2.85 million square feet. The City accounted for 1.0 million square feet, down 15.8 percent on the quarter and slightly below its five-year quarterly average of 1.4 million, a 41 percent share of the total. The West End took 0.8 million, up 27.1 percent on the quarter and 6.9 percent on the year, a 32.9 percent share.
The numbers are a quarter old and my access to later ones is limited, so I treat them as a snapshot and not as a verdict.
Vacancy
Vacancy, the number that makes headlines, was 8.4 percent across Central London, down 23 basis points on the quarter, against a five-year average of 10.6 percent. In the West End it was 6.8 percent, against a five-year average of 7.5 percent. In the City it was 9.8 percent, against 13.4 percent.
This is the figure that surprises people who have read a decade of articles about the death of the office. Rents and vacancies, taken together, say that tenants are still bidding for good space even if they take less of it.
Rents and Supply
Prime rents in the City were 92.50 pounds per square foot, up 8.8 percent year on year, and in the West End 175 pounds, up 6.1 percent. Supply was 22.8 million square feet at the end of the quarter, down 2.1 percent on the quarter and 10.8 percent on the year, below the five-year quarterly average of 24.6 million. Grade B stock makes up 73 percent of supply.
Read together, they describe a market in which the best space is scarce and expensive and the ordinary space is plentiful. That is an old London story told with new numbers.
What It Means for Those Who Work From Home
I write most of this column from a kitchen table in North London, so I have a conflict of interest. The figures suggest that firms have not abandoned the centre. They have changed what they want from it: better buildings, better locations, fewer desks. A tenant who needs fewer seats will pay more per seat to get a building that people want to visit.
The 73 percent share of Grade B stock in supply is the other side. Older buildings with weaker credentials face the risk of becoming obsolete, which is why the conversion of offices to homes keeps appearing in planning applications.
The Politics of the Skyline
Planning and politics follow property. The City’s office market affects business rates, jobs and the Corporation of London’s budget. Boroughs from Camden to Islington weigh offices against housing. A shortage of prime space makes it more tempting to approve towers; a glut of older stock makes it more tempting to approve flats. Neither choice is neutral.
The report does not mention a development pipeline, so I will say nothing about future supply except that it matters.
City Against West End
The two halves of the centre moved in opposite directions in the quarter: the City down 15.8 percent, the West End up 27.1 percent. A quarter is a short time, and the report does not say which lettings drove the swing, so I will not offer a theory about particular tenants. A single large lease can move a figure of this size.
What the pair shows is that central London is not one market. The West End has lower vacancy and higher rents, at 175 pounds against 92.50. The City has more space available and a lower price. Tenants choose between them on cost, location and the sort of building they want to be seen in.
What Landlords Are Doing
With vacancy below the five-year average and prime rents rising, landlords of good buildings have little reason to worry. Landlords of older stock have more reason. The report’s note that Grade B stock makes up 73 percent of supply is the sentence I would put on the wall of any owner of a dated building. Refurbishment, conversion or sale are the usual answers, and each costs money in a year when borrowing is not cheap.
Readers who want the wider context for borrowing costs can look at the Bank of England column earlier in this series.
Reading With Care
A quarter’s take-up can swing by 10 percent without anything changing. The five-year averages quoted are a useful guide, because they smooth the noise, and on that basis the City is slightly below its average for take-up and well below its average for vacancy. That is a market that is not weak, though it is not racing.
For the person deciding whether to sign a lease, the lesson is to compare the building with its neighbours, not the market with its past.
And for the rest of us, the lesson is that the death of the office was exaggerated, as the death of the high street has been several times.
Humour as a Mirror
Markets that worry are easy to laugh at, and the Cebu condominium story has drawn plenty of that: empty showrooms in Manila News, paperwork for British pensioners in the London Prat (at https://prat.uk/cebu-estate-agents-demand-character-references/) and long showings in Bohiney. See also prat.uk and bohiney.com.
Note: Philippine authorities are examining unproven allegations about Thomas Markle Sr., who lived in Cebu until earlier this year, as GMA News and the Guardian have reported. No charges have been filed. Child protection is a serious matter; the jokes here are about a property market.
For the lighter side of the news, there is always The Daily Squib.
SOURCE: https://bohiney.com/cebu-realtor-cant-sell-beachfront-listings/