Offices in the West End have seen the biggest jump in worker occupancy levels over the past six months, according to our latest analysis of eight major European cities. While Madrid, at 65%, now has the highest average occupancy rate, London’s West End now has an average occupancy rate of 62% compared to 50% in February, it’s now on a par with Paris, which was previously top of the leader board. With pre-pandemic occupancy rates of European offices averaging about 70%, the West End is not a million miles away from the old days of 2019. 

Average occupancy levels in the City have improved too, from 48% to 50%, but the numbers in the West End have shot up faster due to its more diverse occupier mix. When you break London’s average occupancy rates down by sector, Finance (excluding Insurance), is second at 63%, and includes a lot of private equity and investment management employees which tend to have strong ‘in the office’ cultures. Many of these companies have their homes in Mayfair and St James, and their robust demand for prime space continues to apply upward pressure on rents in these locations. 

London’s tech sector – who are majority focused in the West End periphery towards King’s Cross and in the City fringes - currently have the lowest average occupancy rates, at 41%, however this hides large variations between those that are US-headquartered and those that have UK or European HQs, as the latter tech occupiers are generally observing higher occupancy rates. At the top end, some fast-growth, UK-headquartered AI companies are even reporting over 85% occupancy rates, and are subsequently seeking to upsize their space, we are seeing similar demands from non US-headquartered tech companies too – particularly fintech.  Clearly, there are cyclical factors which have been well documented around tech layoffs following over-hiring and current lower levels of corporate fundraising. But there’s also a structural impact, as US HQ companies look to right-size their office portfolios to reflect hybrid working practices and release space that they were holding for future expansion, for example the c.300,000 sq ft surrendered by Meta at Triton Square Euston.

Of course, all the rates we’re discussing are averages. As is well-documented, occupancy varies from day to day, with Tuesdays the busiest and Fridays quietest. But while lots of attention has been paid to the low office attendance levels on the latter (whether in the West End or City) it’s not the troughs we need to focus on, but the peaks. When making decisions about taking space, office occupiers need enough to accommodate their employees comfortably on the days of maximum attendance; when it comes to real estate decisions the quietest days are therefore almost immaterial (although they do provide an opportunity for occupiers to reduce their energy bills or carbon impact by cleverly managing their facilities on underutilised floors). Providing a workplace to encourage staff to “earn the commute” with well-designed offices offering a variety of settings and amenity rich facilities is much talked about to get staff back in more frequently.

Overall, with the West End average occupancy rate edging closer to pre-pandemic norms and the City creeping up too, there are reasons to be cheerful. Occupier demand continues to intensify for best quality office space in well-connected locations. Amid construction delays, rising build costs and a shortage of prime stock, occupiers will have to compete for the best space, supporting continued prime rental growth. Occupiers looking out to 2026-2027 lease events are fast realising the need to think ahead now to get the best space.

Further information

Contact Andrew Barnes or Mike Barnes

Spotlight: European Office Occupancy Rates