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Supply constraints will determine market dynamics
Provisional take-up for 2025 in Central London was 11.4m sq ft.
We expect similar levels of take-up in 2026, with risks more heavily weighted towards the downside. For the *Big Six UK office markets, provisional figures show that 2025 take-up was 4.2 m sq ft. In the regional markets tracked by CBRE, we forecast that take-up will decrease by 11% in 2026. Despite this, we anticipate prime rental growth in both London and regional office markets because of supply side constraints.
Take-up volumes were marginally below average in 2025 due to a higher-than-normal number of occupiers choosing to renew or regear rather than take a new lease. This trend has been driven by a lack of availability of high-quality, well-located stock, especially for larger-scale floorplates. Increased fit-out and rental costs have also been key factors driving occupier decisions. In 2026 these dynamics will persist.
At the end of 2025, there was just 8.0m sq ft of unlet, under construction space across all office markets tracked by CBRE.
Relative to the annual average take-up of development space across the UK of 6.4m sq ft, this implies that there is only 1.3 years of supply currently under construction. We expect construction starts to remain below trend levels in 2026 due to a combination of issues including planning constraints, elevated construction costs, and the high cost of development finance.
The tight supply of new space in prime areas is likely to increase rents at the top end of the market in 2026. Having seen 9.1% prime rental growth in the City core and 18.8% prime rental growth in the West End core in 2025, prime rent forecasts predict further growth in 2026. The City core could see prime rents reach £93.00 psf by the end of 2026, and £200.00 psf in the West End core. Similar dynamics are expected in the regional markets, with between 1.0% and 5.3% prime rental growth forecasted in most cities in 2026.
Due to the tight supply of grade A space in core locations in each UK city, we expect some larger corporate occupiers to focus on more peripheral areas, in pursuit of either lower cost or better-quality stock. A shift in demand to peripheral areas will see rental growth spread beyond core locations in 2026.
Figure 3: Development pipeline, UK regional cities
Note: UK markets tracked by CBRE include; Central London, Cambridge, Oxford, *Birmingham, Bristol, Aberdeen, *Edinburgh, *Glasgow, *Leeds, *Manchester, *Liverpool, Southampton
Figure 4: Development pipeline, Central London
Trends to watch
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Level demand
Take-up in 2026 is likely to reach similar levels to 2025, as demand will be constrained by a lack of availability of grade A space in prime locations in most UK markets.
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Supply pipeline
There is only 1.3 years of supply currently under construction across the whole of the UK. The pipeline will lease at a quicker rate than new constructions commence. As a result, this undersupply of grade A office space will compound in 2026.
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Peripheral locations
Tight grade A vacancy in core markets, as well as an increased focus on cost, will shift many large occupiers’ requirements towards good quality space in more peripheral locations, ending the domination of ‘flight to core’.
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Rental growth
Above-inflation rental growth is forecasted for all prime UK markets in 2026, although growth will be slower than in 2025.
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Best in class space
Over the course of the year, intense competition for scarce, grade A stock could push rents in some regional cities towards £55.00 psf at the top end of the market. This is the level needed to justify the start of a new speculative development cycle, which would help alleviate supply-side issues.