According to Savills, the research also shows an increased confidence in larger deals. The volume of transactions over 50,000 sq ft was the highest since H1 2019, while the number of deals over 100,000 sq ft was at its highest level since 2017. In the City, which accounted for 3.1m sq ft of the transactions, some of the largest transactions included Squarepoint’s pre-let at 65 Gresham Street, with the refurbishment due to complete in 2028.

The Insurance & Financial sector remains the primary driver of leasing activity, accounting for 29% of H1 take-up, with strong demand from hedge funds, international banks, and asset management firms significantly boosting sector activity. At 1.25 million sq ft, Insurance & Financial sector take-up was up 34% on the long-term average, with the number of transactions completing having remained in line with the 10-year average.

Prime office rents continued to climb across the first half of the year, as both the City and West End markets set new records amid the sustained demand for best-in-class space. The average prime rent in the City reached £103.79 per sq ft, while in the West End the average was £178.11 per sq ft, an increase of 10% on the H1 2024 average.

Active demand continued to rise across Central London and at the end of H1 stood at 13.7m sq ft, up 50% on the long-term average and 15% on H1 2024. Demand across Central London continues to be boosted by a higher volume of occupiers who have been at their current office for a long time and are now exploring their options: 5.2m sq ft (38%) of active demand consist of occupiers who have been in situ for 15 years or more.

Philip Pearce, Executive Director of Savills Central London Agency team, comments: “The strong office take-up stats are positive and reflect a wide range of businesses across London growing their headcounts. There were a couple of significant pre-lets in the market, a trend that is likely to be replicated in H2.”