Central London Faces Office Space Shortfall as Developers Call for Planning Reform
The report states that 56 per cent of central London office space, equating to approximately 147 million square feet, is classified as secondary space.
A substantial proportion of existing stock
is now considered outdated.
Many of these buildings provide ageing, lower-quality environments and are unlikely to meet mandatory sustainability standards due to come into force by 2030. As a result, large-scale refurbishment, repositioning or redevelopment is expected to become increasingly necessary.
At the prime end of the market, vacancy rates have tightened sharply. Availability of top-tier offices is close to historic lows, with just 0.8 per cent of prime and 1.7 per cent of Grade A space currently unoccupied. Only around a dozen very large single-floor offices exceeding 40,000 square feet – typically sought by major firms consolidating operations – remain available.
Occupier demand remains robust. Businesses are actively seeking approximately 10 million square feet of space, around 7 per cent above the long-term average. Financial and professional services firms are identified as the primary drivers of this demand.
Although 15.4 million square feet of new office space is scheduled for completion between 2025 and 2029, a significant proportion is already pre-let or located outside the highest-demand areas of the City and West End. The current development pipeline is therefore unlikely to fully replace space lost since 2018 or satisfy projected future requirements.
The London Property Alliance, which represents leading developers and investors in central London, is calling for major office schemes to be treated as essential economic infrastructure. It argues that planning and regulatory processes should be streamlined to improve development viability.
Developers cite viability as one of the most significant barriers to delivery, pointing to complex planning requirements and rising financial obligations attached to new schemes. They are urging local authorities to simplify regulations, reduce associated burdens and create a framework that supports large-scale refurbishment and redevelopment projects.
For contractors operating in commercial fit-out, M&E and full building refurbishment, the figures suggest potential for increased activity in central London, particularly where ageing stock requires comprehensive upgrade to meet sustainability and occupier standards.