Quarterly Review: Q4, 2025
The latest indicators suggest that global GDP growth slowed in Q4 2025. But there were also some more upbeat signs. Business surveys perked up in January, the AI buildout continues to buoy world trade, and lower interest rates are supporting stronger credit growth and consumption in developed economies.
Central London office take-up improved sharply at the end of last year. In 2025 as a whole, however, activity was almost identical to the previous year at 11 m sq. ft. and so broadly in line with recent historical averages. Overall, Central London vacancy dropped to 8.6 %, a rate last seen in mid-2022.
Improving sentiment in the capital drove Q4’s rebound in purchases to £2.4bn, the highest since Q1 2023, underpinned by four deals over £200m. But for Central London offices, the year as a whole still disappointed, with just under £7bn transacted, better than the record lows of 2024, but still shy of longer term average performance.
There was a continued softness in regional activity in Q4, with only around 1m sq. ft. taken up across the Big Five markets. That put demand below the long-term average and behind 2025’s outturn. But availability appears to be declining and the pipeline is limited. Meanwhile, tighter supply supported healthy prime rent growth last year, estimated at +5.5% y/y regionally.
The surge in office transactions in London was mirrored in the South East, where Q4 volumes of £1.2bn were the highest in 10 years. However, this was thanks largely to a single deal, Ellison Institute of Technology’s investment in Oxford Science Park. In contrast, UK regions were subdued, with Q4 volumes around half their normal levels.