2024 was a year of continued adjustment in the commercial real estate (CRE) market, particularly in London.
As such, we’ve seen several key trends which are expected to continue in 2025:
Hybrid Work: The hybrid work model remains prevalent, impacting office demand and driving a focus on flexible and collaborative workspaces.
Flight to Quality: Tenants are prioritising high-quality, amenity-rich buildings in prime locations. This is leading to a divergence in performance between Grade A and older stock.
Sustainability: ESG (Environmental, Social, and Governance) considerations are becoming increasingly important, with tenants seeking sustainable and energy-efficient spaces.
Economic Uncertainty: Global economic headwinds and inflation have created uncertainty in the market, impacting investment and leasing decisions.
Predictions for 2025:
While we don’ have a crystal ball, based on our experiences across over 160 moves in 2024, along with current market data and analysis, there are some key predictions for the London this year:
Stabilisation (but not a full rebound): While the market may not see a dramatic rebound in demand, we anticipate a period of stabilisation as businesses continue to adapt to their new normal and make more informed decisions about their office needs.
Continued Flight to Quality and Prime Locations: Demand for prime office space in central London is expected to remain strong, while older, less desirable buildings may face higher vacancy rates.
Increased Focus on Flexible Lease Terms: Landlords are likely to offer more flexible lease terms to attract tenants, including shorter lease lengths and break options.
Technology Integration: Technology will play an even greater role in the office. Examples include: Smart Building Management Systems: These systems use data analytics to optimise energy consumption, improve building efficiency, and enhance occupant comfort. For example, sensors can adjust lighting and HVAC based on occupancy levels, reducing energy waste. Enhanced Connectivity and Collaboration Tools: High-speed internet, advanced video conferencing systems, and interactive whiteboards are becoming essential for supporting hybrid work and facilitating seamless collaboration between in-office and remote teams.
Emphasis on Amenities and Employee Experience: Landlords will continue to invest in amenities and services that enhance the employee experience, such as wellness centres, collaborative spaces, and high-quality food and beverage options. This echos demands from occupiers wanting better & best-in-class facilities for their employees.
Impact on Landlords: Landlords will need to adapt to the changing demands of tenants by investing in upgrades, offering flexible lease terms, and prioritising sustainability. Those who fail to do so may struggle to attract and retain occupiers.
Impact on Occupiers: Occupiers will have more negotiating power in some segments of the market, particularly for older or less desirable spaces. However, competition for prime space will remain fierce, impacting the strategy in a number of ways.
What Occupiers Should Be Aware Of:
In this evolving market, occupiers need to be strategic and proactive and we’ve outlined are some key considerations:
Start Sooner: It takes longer than your think to undertake an office strategy. Coupled with increasingly lower stock levels and competition, starting early will put you in the best position to successfully see through your strategy.
Define your needs clearly: Understand your current and future space requirements, considering factors such as headcount, work style, and company culture.
Prioritise flexibility: Seek flexible lease terms that allow you to adapt to changing business needs.
Focus on quality and location: Investing in a high-quality space in a prime location will maximise employee experience, improving productivity and collaboration. It can also enhance brand image, helping to attract talent.
Consider sustainability: Choose sustainable and energy-efficient buildings to reduce your environmental impact and operating costs.
How Making Moves Can Help:
Navigating the complexities of the London office market can be challenging. As London’s largest occupier-only CRE consultancy, Making Moves is uniquely positioned to help occupiers achieve their office goals. We exclusively represent occupiers, and never landlords, ensuring that your best interests are always our top priority.
Our expertise includes:
Strategic Brief Development: We work closely with you to understand your unique business needs, culture, and growth plans. This allows us to develop a comprehensive brief that aligns with your long-term objectives.
Comprehensive Market Analysis and Due Diligence: We provide in-depth market insights, including detailed analysis of available properties, rental trends, and comparable transactions. Our thorough due diligence process helps you make informed decisions and avoid potential pitfalls.
Expert Lease Negotiation: We leverage our extensive market knowledge and strong negotiation skills to secure the most favourable financial deals and lease terms for our clients, including rent, lease length, break options, and other key clauses.
Space Planning and Design Consultation: We can support and advise on space planning and design, ensuring that your new office space is optimised for productivity, collaboration, and employee well-being, all through our in-house, Independent Project Management team.
Relocation Management: We can assist with all aspects of your office relocation, from move planning and coordination to vendor management and post-move support.
Ongoing Portfolio Management: We can provide ongoing support and advice to help you manage your office portfolio effectively, ensuring that your space continues to meet your evolving needs.
🚚 Source, negotiate and manage entire office moves.
🏢 Dispose, sublet or redesign your office.
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