City Leasing

Q3 2026 witnessed significant take-up, accumulating to 2.1 million sq ft compared to 1.3 million sq ft in Q2 and 1.5 million sq ft in Q1 2026. This was aided by the 470,000 sq ft pre-letting of One Spitalfields, E1 to Jane Street Capital, marking it as the largest off-plan pre-let in the City in over a decade.

Prime rents in the City increased for another quarter, reaching £101.50 per sq ft. This reflects a significant annual growth rate of 7.85%. At the top end of the market, City tower rents and top floor new build rents are now getting to £150 psf; however, more significantly, we have witnessed some low-rise buildings within the City Core achieve in excess of £100 psf for fitted spaces for the first time. Many Cat B refurbished products are now achieving rents in the upper £80’s and £90’s psf.

Shoreditch is experiencing a resurgence in office leasing, driven by acute supply bottlenecks across neighbouring markets and aggressive expansion among artificial intelligence and tech scale-ups, who have made up 25% of London’s leasing activity in recent quarters. With Grade A vacancies in King’s Cross and areas surrounding Liverpool Street squeezed to under 2%, and prime City Core headline rents seeing £100 per sq ft, expanding occupiers are now looking towards the Shoreditch, Clerkenwell and Northern/Eastern Fringe markets.

Fast-funded AI firms scaling rapidly from 5,000 to 25,000 sq ft floor plates are gravitating toward Shoreditch’s flexible fitted Grade B stock. Shoreditch is now consistently securing Grade A rents of £75–£85.00 per sq ft. The vibrant lifestyle amenities and direct Elizabeth Line connectivity via Liverpool Street is now drawing tech talent back to the office. This supply imbalance will drive strong upward pressure on prime East London rents.

Development Pipeline

Vacancy across all grades of offices in the City continued its downward trend in Q3 2026 to 7.5%, down from 8.5% at the start of the year. The supply of new Grade A and newly refurbished space has tightened further, from 6.2% to 5.7% in the last quarter alone, with the City Core experiencing lows of 3.9%. Larger floorplates in excess of 15,000 sq ft are becoming increasingly scarce.

Driven by the 'flight to quality' for top-tier space, the City development pipeline continues to face pressure due to supply shortages alongside significant long-term under-supply. This continues to be driven by high build costs. Off-plan pre-lets are becoming the norm and are a necessity for businesses looking to acquire 100,000+ sq ft of office space over the next 3-5 years. The availability for developments has dropped significantly over the past year to just over 11 million sq ft—a 22% decrease from this time last year—demonstrating pipeline concerns, especially with only c.2.2 million sq ft set to complete in 2027, the majority of which is pre-let.

Headline Market Deals

Key completions in Q3 2026 were Jane Street acquiring 470,000 sq ft at One Spitalfields, E1, Mishcon de Reya acquiring 160,500 sq ft at MidCity Place, WC1, Morningstar acquiring 76,000 sq ft at One Millennium Bridge, EC4, Fora acquiring 70,000 sq ft at Bow Bells House, EC4, and Oracle acquiring 62,000 sq ft at One Exchange Square, EC2.

Allsop Transactions

The City leasing team continued its run of success in Q3 2026. A handful of key completions include Global Banking School acquiring 23,200 sq ft at LaSalle’s Import Republic, E14, Cognition AI acquiring 17,000 sq ft at BGRE’s The Gilbert, EC2, SPF acquiring 15,500 sq ft at U-City’s 33 Gracechurch Street, EC3, Royal BAM Group acquiring 11,100 sq ft at Longmead Capital’s 10 Old Bailey, EC4, Carne Global Services acquiring 8,100 sq ft at 1 Bartholomew Lane, EC2, EcoOnline UK acquiring 6,500 sq ft at British Land’s 3 New Drum Street, E1, and Chang Hwa Bank acquiring 4,000 sq ft at Thor’s 60 Moorgate, EC2.