The latest London Office Crane Survey from Deloitte reveals a decline in new office construction starts and a drop in new builds, resulting from viability challenges and occupiers demanding the best-in-class space.

Deloitte’s London Office Crane Survey measures office development activity across Central London and covers only new-build construction and significant or comprehensive refurbishment schemes of 10,000 sq. ft. and above. The survey covers the City, West End, Docklands, King’s Cross, Midtown, Paddington and Southbank.

Survey construction metrics exclude cleared sites with no construction activity, demolition-only or strip-out-only sites, and schemes where construction has halted prior to completion. In the context of the survey, new builds are schemes that create a new structural frame (typically on cleared sites or following demolition of the previous structure). Refurbishments are significant or
comprehensive works to an existing building that retain the existing structural frame.

The 2026 Deloitte London Office Crane Survey: Headwinds for all, tailwinds for some, collected data between 1 January and 31 December 2025 and covers numerous topics including market realities, geopolitics and macroeconomics; future of the office, impact of AI; setting the stage, planning and investment; Environmental, Social and Governance (ESG), as a baseline expectation; developer expectations, pipeline and leasing; and what the cranes say, including annual new construction start volume, Central London office development and leasing by sector.

Key takeaways from the survey
The survey noted that new start volumes in 2025 dropped to approximately c.4.8m sq.ft. across 57 schemes. This was down from 7.5m sq. ft. in 2024 and 8.7m sq. ft. in 2023. It is also below the five-year average of 6.5m sq. ft.

New build projects more than halved year on-year, accounting for 1.6m sq. ft., down from the 3.6m sq. ft. recorded in 2024. The strategic pivot to refurbishment projects continued, with 3.1m sq. ft. commencing. This represented two-thirds (66%) of new starts, though this was down from 3.8m sq. ft. in the previous year. Refurbishments have now outstripped new development throughout the post-Covid period.

In 2025, 7.1m sq. ft. of office space was delivered to market, a rise of 8% from 2024. This also marks the third highest volume recorded in the Crane Survey’s 30-year history, surpassed only by 2003 and 2023. This survey points to a potential supply gap from 2027 to 2030, as fewer new schemes have started or completed, as developers are tending to bring forward only the most robust opportunities.

However, developers are confident about the resilience of demand among occupiers for Grade-A office accommodation. Most developers anticipate that their office pipeline will either ‘increase’ (58%) or ‘remain stable’ (34%)’ over the next 12 months. 75% of developers also reported feeling more positive about leasing demand than they did 12 months ago. The report also noted that prime rents hit £187 per sq. ft. in the West End, where vacancy sits at 1%.

Future outlook
Future projects
These must be adaptable and designed to appropriate specifications, integrating robust connectivity and high-performance building systems that are AI-enabled and digitally resilient, while also meeting baseline sustainability requirements to keep pace with both evolving investor and occupier demands and rapid technological change. Further, a broader market trend emerges where businesses increasingly prioritise the surrounding micro-environment and social value, looking beyond the office’s four walls. These external factors are pivotal to ecosystem functionality, and this occupier sentiment reflects a structural market shift.

Refurbishment
The shift towards refurbishment is expected to continue, with such projects forecast to account for 65% of all new activity by 2030. This direction is likely to be reinforced by the new London Plan, due in 2027, that is expected to place greater emphasis on refurbishment. Momentum is also being driven by the need to address secondary stock at risk of obsolescence as certain ESG standards become a baseline requirement for investors and occupiers. The case for refurbishment is strengthening, supported by lower materials and labour costs, lower embodied carbon, quicker planning approvals through the ‘Retrofit First’ policy and, ultimately, shorter building programmes.

Workplace expectations
Since the COVID-19 lockdowns in 2020, a series of shocks has shifted workplace expectations in a short period of time. Occupiers have reportedly reassessed headcount, in-office attendance and space per employee, making long-term requirements harder to forecast. Rising AI adoption is also reshaping workforce needs and accelerating the redesign of offices into AI-enabled workplaces. But, with demand in Central London increasingly concentrated on premium, well-located stock optimised for carbon efficiency, occupiers probably need to plan 3-10 years ahead of lease events depending on size to secure space that best fits their requirements. The scarcity of prime space, particularly for large requirements (500,000 sq. ft. +), means that occupiers will need to consider a wider range of options such as: exploring fringe locations, or opting for lease renewals or extensions-to manage costs or considering the higher end secondary stock. Occupiers with less significant space requirements are increasingly considering flexible office space as it offers crucial agility to expand or contract, and greater lease term flexibility than traditional commitments.

Summary
London’s office market remains structurally attractive. Demand has not disappeared. It has concentrated, with occupiers prioritising the best space, investors continuing to favour resilient assets and developers seeing key opportunities in prime locations. London’s role as a global business hub continues to support that demand.

But the market is becoming materially harder to serve. Construction costs, planning delays, selective capital and geopolitical uncertainty are all putting pressure on development viability. At the same time, ESG has become a baseline expectation, whilst AI is starting to raise the bar again by increasing the demand for secure, connected and digitally resilient buildings. The gap is widening between assets that are future-fit and those at risk of obsolescence.

The question, then, is not whether demand for London offices remains but which assets will be best placed to capture it. How should developers, investors and occupiers respond when quality is being rewarded more strongly than ever, but is also becoming more expensive, more complex and more difficult to deliver?

The answer from this report is clear: London’s office market is becoming a market of selective winners. Future value will concentrate in assets that are prime, sustainable, digitally resilient and capable of meeting more demanding occupier needs. As viability pressures constrain delivery, those businesses able to plan early, invest selectively and execute with discipline will be best placed to capture demand.

To read the report in full visit:
https://tinyurl.com/39rzkfsm