Office rents in the City of London are rapidly approaching West End levels as supply constraints push up premium space costs. Prime City rents reached £130.80 per sq ft in the first quarter, narrowing the gap with West End's £165 per sq ft, according to Savills data. This trend reflects accelerated rental growth in the financial district while West End rates have remained relatively flat.

The rental surge stems from limited new development and persistent demand despite remote work trends. Major firms have secured premium space at record rates, including Latham & Watkins paying £160 per sq ft at One Leadenhall and King & Spalding securing £155 per sq ft at 8 Bishopsgate. The City risks running out of prime office space within three years due to construction slowdowns caused by Brexit and Covid.

Despite headline rents, tenants negotiate incentive packages like 24 months free rent on 10-year leases. West End vacancy rates now exceed those in the City for the first time, reflecting more available space. Savills director Josh Lamb expects City rents to continue rising, with £130 per sq ft potentially becoming the new norm for midsize floors as supply remains constrained.