London.... running out of office space!

Ever since lockdown there has been a lot of talk about traditional offices being less relevant given the rise of working at home. However this simply doesn't seem to apply to certainly top-end offices in London!

New predictions show London isn't drowning in empty office space at all. Actually, it's running out. By 2028, the best offices in the City are expected to be 100% full. This is a market that has bounced back more rapidly from Covid than most peopel predicted.

What's behind the squeeze on office space...

It's kind of a problem of predictive markets failing to meet demand....

The idea that working from home would permanently kill demand looks pretty wrong now. Hybrid work is here to stay, but it hasn't removed the need for good, central offices. Instead, it's led to a flight to quality, where companies are fighting over fewer modern, energy-efficient, well-located buildings.

The tight squeeze comes from both less supply and more demand. Office building in London slowed way down after Brexit, then again during Covid, and now higher interest rates and building costs are holding it back. So, there aren't many new projects coming, just as big companies are figuring out their long-term space needs.

It's now more about quality...

Companies like BlackRock, Amazon Web Services, PwC, and Bank of America are all looking for space in the City. These aren't old companies stuck in their ways. They've tried remote work and realized that being together still matters – for working together, for training, for company culture, and for showing clients and rivals they're serious.

That's why buildings like Deutsche Bank's old HQ and new towers near Liverpool Street are getting so much attention. There just aren't many other options.

The story of the Confederation of British Industry shows the same thing. In early 2023, the CBI looked finished, hammered by scandal. Everyone was writing its obituary, saying it was the end of Britain's business voice.

But, like the office market, the CBI didn't just disappear. It reorganized, fixed its leadership, and slowly rebuilt its membership. The lesson is the same: things that are truly part of how the economy works tend to be tougher than trendy ideas suggest.

Final thoughts...

Predictions of sudden death often ignore how much things resist change, how much they can adapt, and how hard it is to replace what's already there. Offices didn't go away; they changed. Business groups didn't vanish; they reformed.