The figure represents a 51 per cent jump quarter on quarter and the highest reading since 2007, according to the latest Marketbeat Central London Offices report from Cushman & Wakefield.
The surge was driven principally by large occupiers circling the Wider City and Canary Wharf, where several sizeable requirements are progressing through lease negotiations.
That is a notable shift in geography. Both submarkets have spent much of the past five years being written off as structurally impaired, yet they are where the biggest deals are now being done.
Take-up recovers and grade A takes the lion’s share
Leasing activity reached 2.46 million sq ft in the second quarter of 2026, up 28 per cent on the previous three months and back in line with the five-year average.
More than three-quarters of that space, 77 per cent, was grade A, reinforcing a pattern that has defined the recovery: occupiers are trading up in quality rather than expanding in floorspace, and second-tier stock is being left behind. The shortage of top-grade space has already pushed some firms into lower-quality buildings.
The West End was the busiest submarket with 1.11 million sq ft transacted, followed by the City on 989,000 sq ft and East London on 324,000 sq ft.
Technology occupiers accounted for a quarter of take-up across the first half. Within that, artificial intelligence businesses were responsible for close to 60 per cent of the space, equivalent to 15 per cent of all Central London leasing.
For landlords, that concentration cuts both ways. AI demand is real and it is signing leases, but it is also younger covenant than the banks and law firms that historically underpinned City rent rolls.
‘A sign of occupier confidence’
James Campbell, international partner and head of London offices leasing at Cushman & Wakefield, said: “The record volume of space under offer is a clear sign of occupier confidence. Businesses may be taking longer to make decisions, but they are still committing to London and increasingly beginning their searches earlier to secure the best grade A space before supply tightens further.”
The point about earlier searches matters more than it might appear. Occupiers starting two or three years ahead of lease expiry is a market behaviour associated with scarcity, not surplus, and it hands the pricing initiative to landlords with the right buildings.
It also reflects the steady hardening of attendance policies that has drawn workers and demand back into central London.
Investment volumes still trail, but yields hold firm
Capital markets have been slower to follow the occupational story. Some £2.06 billion of Central London office assets changed hands in the second quarter, up from £1.94 billion in the first, taking first-half volumes to £4.02 billion.
That remains 15 per cent below both the first half of 2025 and the five-year first-half average, although Cushman & Wakefield said momentum is building.
Prime yields were unchanged across the quarter, at 5.5 per cent in the City and 3.75 per cent in the West End. The agency continues to forecast yield compression over the medium term, a view supported by Knight Frank’s assessment of London office supply and rental growth.
Not every institution is convinced. Landsec is pressing ahead with a £2 billion office disposal programme in favour of residential, a reminder that occupier strength and investor appetite are not the same thing.
What this means for investors
The gap between leasing momentum and transaction volumes is where the opportunity sits. Buyers are still pricing offices off 2023 sentiment while occupiers are competing for 2026 supply, and 4.44 million sq ft under offer is a strong indicator that rents in the best buildings are heading up rather than sideways.
If Cushman & Wakefield is right about yield compression, the window for acquiring well-let grade A stock at current pricing is narrowing. The quarterly Central London office Marketbeat data is worth watching for the point at which under-offer space converts into completed lettings, because that is when headline rents move.
The risk to that view is concentration. A leasing recovery leaning heavily on AI occupiers and a handful of very large requirements in the Wider City and Canary Wharf is thinner than the headline totals suggest. Investors buying into the recovery should be underwriting tenant quality as carefully as the yield.
