London’s office market is changing faster than ever. Prime offices are commanding record rents while older stock is often overlooked. For tenants and investors, this divergence opens a window. If you know where to look, the pricing gap between grade A space and secondary stock can be turned into leverage.
Meanwhile flexi and managed options are thriving, but you need to know how to find them.
Why is the market splitting in two?
A clear flight to quality is reshaping occupier demand. According to the BNP Paribas Real Estate’s Q2 2025 update, 70% of office take-up was in modern, ESG-compliant buildings.
This has pushed grade A vacancy to just 1.2% in the West End and 2.8% in the City, while overall vacancy still sits at 8.8%, leaving older grade B space underused. This is making Central London a messy place to find an amazing office space deal.
Prime offices have surged in rental performance, with the West End reaching £170 per sq ft in Q2, up 6.3% year-on-year, and City rents rising over 9% to £87.50 per sq ft.
Knight Frank’s data shows nearly three-quarters of recent deals involve new or refurbished space. With limited availability of grade A stock, occupiers are competing hard for the best options, while secondary buildings are left struggling for tenants.
Where is hidden value likely to surface?
The gap between scarcity at the top and surplus in secondary markets is where opportunity lies. Businesses that cannot or will not pay premiums can negotiate with landlords sitting on excess grade B stock. These owners often show more flexibility on rents, incentives, or refurbishing deals to secure long-term tenants.
Key dynamics to track:
- Prime rents rising 6% to 9% annually across the City and West End
- Vacancy tightening in grade A stock, while grade B space lingers at higher levels
- 70% of demand going to modern offices, leaving 30% available in older assets
- Landlords of secondary offices more open to lease term negotiations
- Submarkets like Southbank with 9.5% vacancy offering occupier leverage
For deal-conscious businesses, the current split means secondary space can be repositioned as an affordable, central option. Early pre-let or off-market transactions are especially valuable before competition drives prices higher. Meanwhile you can find incredible off-market deals all over London.
Why do off-market and pre-let deals capture the most value?
In a crowded market, the best opportunities rarely make it to public listing. BNP Paribas Real Estate reports that Central London office investment surged 85.8% year-on-year in Q2 2025 to £1.82bn, driven by large transactions above £100m.
Many of these target prime refurbishments and early lease commitments long before completion.
One standout example is 65 Gresham Street, where Squarepoint Capital signed a 400,000 sq ft pre-let on the entire redevelopment, committing years before delivery. This move secured the occupier high-quality space in a location where supply is notoriously tight, while offering the landlord long income security.
For smaller businesses, flexi deals or early entry to repositioning projects provide a chance to influence specifications and negotiate. Landlords, uncertain about future lease-up costs, may be more open to concessions before competition increases. Early access transforms tenants from price takers into value creators. The shoe is on the renter’s foot!
Where does negotiation power really lie?
In today’s market, value is as much about terms as it is about rent. With grade A scarcity pushing occupiers toward older buildings in core locations, tenants willing to accept vintage gain leverage on flexibility and incentives. And if you’re willing to be fast and flexible, your deal-finding opportunities are even better.
Vacancy patterns reinforce this. Knight Frank notes that only two 100,000 sq ft-plus spaces were still in solicitors’ hands at mid-year, pushing much of the competition into smaller units.
In these cases, landlords facing higher costs often agree to stronger tenant improvement packages or break clauses to secure certainty. Submarkets like Southbank, where vacancy rates are above average, provide even more room for negotiation.
The greatest leverage surfaces in three areas:
- Secondary buildings in prime locations where higher availability supports deeper discounts
- Flexible lease structures such as shorter terms and tenant break clauses
- Landlord-funded fit-out contributions that ease upfront capital costs
Targeting these concessions requires speed and precision since once competing bids emerge, the advantage quickly disappears. Successful negotiation is now more about timing and positioning than chasing headline rents.
Turning bifurcation into opportunity with ADAPT
London’s office market has split sharply: grade A space is scarce and expensive, while secondary stock is abundant but under-leased. For many businesses, this uneven landscape creates confusion about where the real value lies. And it’s always in thinking flexibly. That’s where ADAPT steps in.
By combining deep market intelligence with a flexible-first approach, ADAPT helps growing businesses cut through the noise. We unlock access to flexible, managed, and off-market options, early pre-lets, and landlord negotiations where incentives, upgrades, and tenant-friendly terms still exist.
Instead of being forced into overpriced prime towers or overlooked legacy stock, our clients secure agile spaces that align with both budget and scale-up culture.
The result is offices that work harder for growth teams – environments tailored to collaboration and growth while avoiding the costs and compromises that weigh down traditional leases.
With more than 20 years of relationships across providers and landlords, ADAPT consistently connects businesses to opportunities before they reach the open market.
The split we’re seeing in London offices is not a dead end – it’s a filter for finding the best possible flexible deals. When you know how to navigate that divide, what looks like scarcity quickly turns into choice and leverage. ADAPT is an unlock.
Chris Meredith, ADAPT CEO & Founder
What can you do to get ahead of London’s office split?
If you’re weighing relocation, re-signing on a legacy lease, or simply want to explore smarter, more flexible ways to invest your rent pounds – now is the time to act. The bifurcation of London’s office market isn’t going away, but it is creating windows of advantage for businesses that can think fast and move early.
ADAPT helps you uncover value in secondary stock, secure pre-let opportunities, and lock in flexible and managed spaces built for your next stage of growth. Start the search today.
