The City of London broke its own record for office leases in 2024, with 339 deals over 5,000 square feet, research from Cushman & Wakefield revealed.
This beat the previous record of 331 deals, last matched in 2023.
Cushman & Wakefield’s annual London Moves report found city office moves made up 64% of activity in central London, as most companies stuck to core locations.
Out of 531 total deals in central London, covering 9.7 million square feet, the majority (451) were for spaces between 5,000 and 25,000 square feet.
In the larger end eight deals were completed, seven involving occupiers taking on more space, which led to a net expansion of 668,000 square feet, the largest since 2018.
Ben Cullen, head of UK offices at Cushman & Wakefield, said: “The City triumphs as the most attractive location in London for office space right now.
“Its supply of top quality space, access to amenity and unrivalled connectivity works for people across the workforce and as such there is intense competition for space.
“Supply shortages emerging across the core West End markets have constrained transactions to a degree, but nonetheless occupiers continue to be keenly focused in these locations.”
Cullen added: “As a result, rents have pushed to new highs and are expected to continue to rise further.”
The research also revealed a clear trend for companies sticking to familiar ground.
Of those relocating, 165 moved within their existing submarket, more than the 142 that moved to a new area.
In the City, 94% of firms relocating stayed within the wider market, the highest on record.
Among all moves, the average distance between old and new offices was 0.7 miles, the lowest recorded by Cushman & Wakefield since it began tracking in 2013.
Kiran Patel, head of London offices research at Cushman & Wakefield, said: “Prior to the pandemic, Central London office transactions had a broad distribution with hotspots of activity in the City and West End, but also in Canary Wharf, Hammersmith and in peripheral submarkets.
“Today, the flight to centrality for investors, occupiers and developers alike is clearly visible.
“We are witnessing activity shrinking away from the edge and clustering around core locations and thus concentrating areas of strong rental prospects and declining vacancy rates.”
Additionally, data revealed that the West End continued to draw interest, with 183 deals, 19 of which were new market entrants.
However, the research found this was down 4% from 2023.
The research also found most established occupiers (78%) across central London took more space than before, leading to a net increase of 3.27 million square feet, well above 2023’s level.
On average, companies increased their footprint by 38%.
Grade A space made up 65% of leased space in 2024, the second highest share ever.
Cullen said: “It was common to hear ‘less but better’ cited as the direction of travel for office occupiers in 2024, but the majority expanded on their former space.
“The increased focus on the best buildings is true, and companies are paying ever higher rents and business rates to secure it.
“This has forced occupiers to carefully consider the value offices provide to their business and staff and the evidence strongly points to the perceived return on investment.”
