Demand to lease London offices fell by 11% annually during the second quarter of 2026, but completed lettings increased as occupiers concentrated on modern, high-quality buildings.
Rightmove’s Commercial Insights Tracker recorded declining enquiry demand across 10 of the 11 London boroughs it monitors.
Lambeth was the exception, recording 1% growth. Kensington and Chelsea experienced the largest fall at 34%, followed by the City of London at 30% and Hammersmith and Fulham at 26%.
National office leasing demand declined by 2%, although Scotland recorded 11% growth, with the East Midlands and South East both increasing by 1%.
FLIGHT TO QUALITY
Rightmove says its figures compared online demand with a particularly strong second quarter in 2025 and did not reflect uniform weakness across every class of office.
Louise Sedgwick (main picture, inset), Commercial Director at Rightmove, says: “The headline statistics don’t tell the whole story.
“Demand in the London office market is becoming increasingly concentrated on the best-quality office space, with well-located Grade A buildings offering high levels of amenities and strong environmental credentials continuing to outperform.
“On the other hand, secondary office spaces, especially in less attractive locations, are struggling. This isn’t just a London story—it’s something that we’re seeing in commercial centres across the country.”
Knight Frank recorded 3.1 million sq ft of London office take-up during Q2, 24% more than in the previous quarter and 11% above the long-term average.
Its figures measure completed leasing activity rather than Rightmove enquiries and use different comparison periods. Around 70% of take-up involved new or refurbished offices.
Shabab Qadar, Partner, London Research at Knight Frank, says: “Flight to quality is gathering pace.
“Momentum remains strong, with a further 3.7 million sq ft under offer and active demand rising to 14.3 million sq ft, up 43% year on year.”
AI DEMAND
King’s Cross and Euston recorded 350,000 sq ft of take-up, almost three times their long-term average, as artificial intelligence businesses expanded their London presence.
AI companies have reportedly leased more than 660,000 sq ft in London during 2026, supporting demand around the capital’s technology and research clusters.
Office investment demand fell by 9% nationally and 7% in London. Knight Frank recorded £2bn of London transactions during Q2, 30% below the long-term average, with another £2.6bn under offer.
Industrial and logistics property remained the strongest commercial sector in Rightmove’s tracker, recording growth in both leasing demand, up 3%, and investment demand, up 7%.
CHANGING MARKET
Nathan Emerson, CEO of Propertymark, says: “These figures reflect a changing office market rather than a declining one. Businesses are increasingly prioritising modern, flexible and energy-efficient workspaces, while older stock is becoming harder to let.
“This underlines the need for continued investment to upgrade commercial properties and give landlords the confidence to improve existing buildings.
“With demand varying across different regions and sectors, the right planning and regulatory environment will be key to supporting regeneration, attracting investment and ensuring commercial property continues to meet the needs of businesses and local economies.”
