London office rents are splitting in two. Prime submarkets are set to keep climbing, while many peripheral districts stall. That is not just a real estate story. It is a talent and productivity decision for CFOs.
Where will London office rents diverge by 2026?
Knight Frank Research reports a structural undersupply of 10.8m sq ft over the next five years, with only 15.6m sq ft under construction and an undersupply of 7.5m sq ft expected by the end of 2028. That shortage is pushing prime rents higher and locking in pricing power for the best located, high quality space.
In the West End Core, prime rents now sit at £182.50 per sq ft after a 21.7% annual rise, with average annual growth of 5.2% projected through 2029.
In the City Core, prime stands at £100 per sq ft with 14.3% annual growth and a 5.8% annual growth outlook. By contrast, Canary Wharf at £57.50 and Stratford at £48.50 were flat in the latest quarter.
What should CFOs take from a two speed market?
The commercial real estate market isn’t moving at one pace. Prime assets continue to show strength, while secondary locations lag behind. For finance leaders, understanding these diverging trends is key to making informed occupancy and investment decisions. Recent insights point to a clear pattern:
- Prime locations are forecast for 5 to 8% annual growth. This is led by the West End and City Core, according to Knight Frank Research.
- Secondary areas show stability not momentum, which limits upside and negotiating leverage.
- Headline rents are rising, yet incentives remain high and real rents are still comparatively low after inflation, says Knight Frank Research.
- Proximity to major transport lifts pricing and demand, a pattern echoed by Mark Davies at Strutt and Parker who links better rail access to value gains.
The flight to quality is intensifying. Knight Frank Research notes that 77.6% of recent take up targeted new or refurbished space.
That tells you where talent wants to be. Pay the premium and capture performance benefits, or save on rent and risk lower attendance and weaker productivity in secondary stock.
Which locations earn that premium most reliably comes down to transport connectivity, which we explore next.
How does transport connectivity reset the rent curve by 2026?
Transport access is the clearest rent multiplier in London right now. The Ashby Capital research team finds Elizabeth Line locations are commanding premiums, with Farringdon leading on 46.6% nominal rent growth over ten years.
Bond Street and Liverpool Street show 17 to 20% gains in the last two years tied directly to Crossrail access.
Farringdon has also forecasted for a 38% jump in business rates from 2026. This signals strong underlying rental momentum, reports the Workplace Insight editorial team.
The mechanism is simple and measurable. Better connectivity widens the effective talent pool and cuts commute friction which reduces drop off in return to office plans.
The Ashby Capital research team reports occupier briefs increasingly ask for offices on the route of Crossrail. In ADAPT client mandates Crossrail and Thameslink adjacency now sits consistently in the top three requirements.
Companies near Farringdon, Liverpool Street, Paddington and Tottenham Court Road report easier recruitment and higher employee satisfaction in our client work.
Faster hiring and smoother cross city collaboration then justify the rent premium through operational gains.
For CFOs the choice is an operating model decision rather than a line item. Paying more near an Elizabeth Line hub can be offset by reduced time to hire, lower attrition risk and fewer delayed meetings, while also improving client access.
Incentives help manage optics. The market is rewarding location and specification together, which sets up the next question on how the flight to quality is widening pricing gaps.
How is the flight to quality widening pricing gaps by 2026?
The gap between high-spec and legacy buildings is no longer about age or design. Tenants are prioritizing buildings that support hybrid working, wellness, and operational efficiency. That preference is reshaping rent structures as demand clusters around assets that deliver measurable performance advantages.
In practice, this means occupiers are competing for a smaller pool of Grade A space that offers the right mix of flexibility, ESG compliance, and digital infrastructure. Landlords who can meet those standards are holding firm on pricing, while older stock faces extended voids and steeper incentive packages to stay competitive.
The market is effectively segmenting into two parallel systems: one where best-in-class buildings command premiums through utility and brand value, and another where secondary offices are valued primarily through discounting. For CFOs, the pricing gap is a reflection of which assets align with long-term workforce and sustainability strategies.
That divide will deepen through 2026 as occupiers continue to link location and specification directly to productivity outcomes. This sets the stage for how finance leaders can turn those premiums into measurable performance gains.
How CFOs can turn location premiums into performance gains
London’s office market has split in two: prime, transit-rich submarkets are compounding, while peripheral districts stall.
Connectivity and quality now decide talent and productivity outcomes, not just rent lines. ADAPT’s role is to help growth-minded teams secure the right address and specification-near the Elizabeth Line and major hubs-without overpaying or locking into rigid commitments.
We solve this by pairing market intelligence with a 360° delivery. Our platform rapidly curates a Top 10 shortlist around Crossrail/Thameslink adjacency, building quality, and cultural fit.
Then we leverage today’s robust incentives and flexible/managed structures to neutralise headline rent optics, compress time-to-move, and keep terms scalable as your headcount shifts.
With 20+ years of relationships, we unlock off-market options and fit-out solutions so the space functions as a talent magnet from day one.
In our client mandates, Crossrail and Thameslink sit consistently in the top three requirements; companies we’ve placed near Farringdon, Liverpool Street, Paddington and Tottenham Court Road report easier hiring and higher employee satisfaction.
That’s the ROI the market is rewarding-location and specification together-secured on terms that protect cash and optionality.
Rents are diverging, but the real spread is in outcomes. Buy connectivity and quality, then use incentives and flexible structures to balance the budget. That’s how you turn real estate into a performance lever.
Chris Meredith, ADAPT CEO & Founder.
What can you do to get ahead of London’s two-speed office market?
If your renewal is due before 2026, your hybrid policy is shifting, or you’re tied to a legacy lease in a secondary location, now is the moment to act.
Transit-linked, best-in-class space doesn’t just work better-it shows better to talent and clients. ADAPT can help you pinpoint the right, connected office (that fits your needs perfectly), negotiate incentives to offset premiums, and set you up with a flexible, future-proof solution.
The gap between prime and secondary space is widening. Discover how ADAPT can position you on the right side of it.
