London’s Future: Driving Growth Across Real Estate

What does the future hold?​
Connect with Our Team

Three major trends will transform London’s real estate

There are wide‑scale trends that will impact the look, feel and performance of future cities, but they will still drive growth.

The future is uncertain and the macro‑trends that will impact global real estate markets are yet to be fully discovered. For now, we can be sure that London will be impacted by changing demographics, technology, artificial intelligence, and sustainability.

1
Demographics
2
Technology and artificial intelligence
3
Sustainability
london-breaker-demographics

1

Demographics

population

The Inner London population is expected to grow by 23% from 2025‑2050*. The total number of households is due to increase, while the average household size will reduce.

*In the same time period, the working age population is expected to increase by 569,060 (+21%) and the over 70s population by 176,410 (+79%).

As a result, demand for homes and workspaces, related services, and amenities should remain robust. An ageing population will reinforce the need for healthcare and senior living in London which is already undersupplied. This will place further demands on construction, infrastructure, and housing supply and intensify the pressure for limited development sites in London.

Market sentiment is beginning to respond. Among alternative sectors, European lenders are favouring senior living and there is pent‑up demand to invest in UK healthcare assets.

*Source: ONS, Oxford Economics
london-breaker-kings-cross-tunnel

2

Technology and artificial intelligence

ai

Technology and artificial intelligence are transforming everyday processes and could change real estate utilisation.

London is a powerhouse tech market, positioned to be a global leader in AI. The rise of AI has led to new space-takes by major tech players in London, reinforcing their commitment to the city and fuelling clustering and downstream growth.

The UK Government has implemented several initiatives to support AI development, including the formation of the AI Security Institute. Data centres are now defined as Critical National Infrastructure which could represent a step towards upgrading capacity requirements, however constraints on grid power and land availability in London continue to hinder progress.

There are broad asset‑level opportunities to upgrade London’s buildings by installing smart technology and implementing AI‑powered facilities management.

Modern green building in city

3

Sustainability

sustainability

London is navigating – population physical climate risk, transition risk, and social sustainability.

Occupying environmentally sustainable real estate has become a C‑Suite level priority, as many organisations have committed to sustainability targets. Assets also need to be protected against physical risks, compliant with changes to MEES regulation, and a rising number of developments are considering embodied carbon emissions.

Our analysis of MHCLG data indicates that the new issuance of MEES compliant EPCs has become more common, across both commercial and residential properties. But ultimately, the electrification of building heating is an essential step in decarbonising, and this demands upgrades to the national grid.

The need to forge a path to net zero brings opportunities in core sectors such as renewables. Additionally, there is a significant amount of capital looking to deploy in sustainable assets – if London can continue to adapt its real estate to become more sustainable it could attract a larger proportion of this.

There are indications of an investment performance gap between efficient and inefficient buildings. Socially sustainable attributes like accessibility, wellness, and public realm activation could potentially raise building traffic and positively impact property values.

london-breaker-oxford-street-6

What does the future hold?​

Oxford Street: Reinforcing its status as a global destination

Oxford Street is an established destination for major global brands which attracts an international consumer base. The street is undergoing a rebalancing of asset mix and revival of the public realm to align it with changing consumer preferences.

oxford-street-retail

Oxford Street’s retail revival

From a retail perspective, the Oxford Street address is as in demand as ever and global brands are targeting the area for their new flagships or expanding portfolios. In fact, demand has increased substantially in recent times in line with economic recovery, asset repricing, and the fall in total occupancy costs. At the mid‑year point vacancy was low at 2.1%, hence prime retail rents have seen year-on‑year growth, up 19% at Q3 2025.
oxford-street-elizabeth-line

Elizabeth Line fuels activity

The opening of the Elizabeth Line in 2022 has boosted investment performance and changed pitch perceptions for both retail and office properties surrounding the Bond Street and Tottenham Court Road stations. There are examples of newly completed office developments achieving record rents and reaching 75% let one to two years before practical completion, as they meet the top criteria for many office occupiers – accessibility.
oxford-street-surge

Oxford Street’s office pipeline

There is 1 million sq ft of office development space in the pipeline to 2029. And due to its preferential central location for office occupiers – of the 0.4m sq ft already under construction – 74% is already pre‑let or under offer.
oxford-street-store

Retail transformation

The office pipeline includes the redevelopment of both the former Debenhams (The M Building) and House of Fraser (The Elephant). These schemes are part of a wider ongoing transformation of the traditional department stores on the street and are simultaneously supporting occupier demand for large office floorplates in the West End.

Already, John Lewis has invested £6.5m to upgrade its store in line with changing consumer preferences. In the longer term we can anticipate the redevelopment of Marks & Spencer’s Marble Arch store and subject to planning consent, 33 Cavendish Square; including the former BHS.
oxford-street-pedestrianisation

Pedestrianisation

There are plans to transform the street further by pedestrianising from Oxford Circus to Marble Arch, and the Oxford Street Development Corporation has been established to implement this. The changes have the potential to elevate visitor experience (increasing consumer footfall and dwell times) through a coherent approach to regenerate the street, supporting the existing efforts of the New West End Company Business Improvement District and Westminster Property Association.
oxford-street-investment

Strong market sentiment

These investments re‑affirm market confidence in Oxford Street as:

1) A global retail destination, and,
2) A hotspot for future commercial growth.

We expect the upgraded public realm to create greater competitiveness for commercial tenants looking to occupy units along or near to the street, but the reworking of internal spaces is already encouraging a more efficient use of the space available. There is promise for investors as strong occupancy levels and the right asset mix will have positive impact for property performance.
London financial district

What does the future hold?​

The Square Mile: Embracing change

The City of London has a track record of success, and there is substantial growth potential due to the greater building height available in the City. This opportunity, combined with a progressive approach to governance, will boost London’s development and set an example for other submarkets.

London skyline

Historically dominant centre

The City of London generates £109bn economic output per year. According to CBRE’s market boundaries, London’s City market is the second largest Central London market by quantum of office stock (79m sq ft), seeing on average £4.9bn office transactions and 5.1 million sq ft of office take‑up per annum. Additionally, the City is much more than a 9‑5 office destination; it receives an average £557m per year of investment into other real estate assets including hotels, mixed‑use and residential buildings. The City has nearly 600 listed buildings, 48 scheduled ancient monuments and 27 conservation areas, but its historical significance has not stopped it reinventing itself repeatedly.
the-square-mile-02-growth

Growth strategy

Occupiers are drawn towards the City for its accessibility, best‑in‑class buildings, established industry clusters and quality public realm. But the City of London Corporation has active initiatives to boost the market further. ‘Destination City’ is its growth strategy which strives to showcase the inclusive culture and hospitality offering and attract SMEs with the aim of raising average footfall.
the-square-mile-03-plan

Planning and development

The outlook for planning and development across London and in the City has become increasingly crucial given the rising need for environmentally sustainable development and the imbalance of quality assets relative to demand in some locations. The City of London Corporation is also increasingly mindful of the relatively small but important resident population and the social value potential of future developments. The Draft City Plan 2040 sets out the framework for future planning and development decisions which once adopted, should see development proposals assessed by their contribution to growth, sustainability, wellbeing and inclusivity.
Paternoster Square

The right asset mix to support strategic goals

The City of London Corporation is invested in the protection and upgrade of office stock to maintain London’s economic growth. They have a goal to increase net floorspace by c.13m sq ft or 13% (2021-2040) as a minimum, with encouragement towards floorspace which supports innovative start‑ups and small businesses. While protecting offices, their policies have become more amenable to change of use in instances where office loss is justified and it can boost Destination City objectives.
the-square-mile-05-change

Key areas of change

The City of London Corporation has a strategic outlook and has set out plans for broad transformation across several Key Areas of Change. These are outlined within the Draft 2040 plan and highlight policies to support complementary asset mix and street‑level activation to elevate each micro‑location. The planning granted at Custom House to convert offices to a hotel, with distinct improvement to public riverside space, demonstrates commitment to this approach within the Pool of London Key Area of Change.
London skyline

Dynamic and continually evolving

These frameworks demonstrate the City’s advantageous position as a market that is adapting to business demands and consumer expectations and is primed to attract innovation. We can expect the occupational market to continue to thrive in these conditions, and for investors and developers, many City assets have the potential for significant uplift against a resilient demand backdrop.
Canary wharf skyline with skyscrapers

What does the future hold?​

Canary Wharf: Re-inventing the banking district

The Canary Wharf market has transformed its identity from London’s banking and finance district, to a vibrant seven day a week mixed-use destination. This has redefined the market opportunity – by bringing it in line with consumer preferences and creating a fresh and vibrant destination.

Canary Wharf offers a rare chance to refurbish built stock or build on already consented land at scale, in a central location.

Canary wharf residential

Diversifying Canary Wharf

Master‑planning and intentional change-management has curated a more diverse environment in Canary Wharf. The real estate offering has broadened to accommodate the requirements of new industries, and as a result the market has seen the occupier sectors expand. Most notably a new population of tech and innovation companies are clustering in Canary Wharf; a shift being further fuelled by the upcoming development of the One North Quay vertical campus.
canary-wharf-02-live

Live-work-play

At the same time, community events and public realm upgrades (e.g. the newly unveiled Eden Dock and Troubadour Canary Wharf Theatre) have increased vibrancy in the market and refreshed the offering for occupier companies and consumers. The growth of the residential community on top of this has been integral to rebranding the market and creating a true ‘LiveWork‑Play’ environment. According to Molior over 5,500 residential homes have completed in Canary Wharf in the last five years (2020‑2024) – more than double the number in the previous five – and construction is still ongoing. Wood Wharf for example, will have added up to 3,600 homes once fully complete.
canary-wharf-03-transport

Transport connectivity

The opening of the Elizabeth Line has complemented this wider progression, facilitating the footfall driven by the leisure provision and new homes. It has also improved access to Heathrow airport, building on Canary Wharf’s existing proximity to London City airport – a long‑standing pull for international organisations.
canary-wharf-04-development

Development opportunity

Canary Wharf is one of very few Central London markets with good quality built stock ready to be refurbished, or plots of land with existing planning consent and the ability to build high. These factors present a rare opportunity for landlords and developers to accelerate the speed to market and potentially upgrade stock without having to negotiate prohibitive development costs. For occupiers, Canary Wharf has historically operated at a discounted occupational cost compared to some other central submarkets – now, the range of initiatives re‑vitalising the environment have created even more value.
Greenwich Park view of Canary Wharf

Wider ecosystem

The transformation is paving the way for neighbouring markets to follow and Canary Wharf will benefit as the surrounding residential population increases. Canada Water for instance is undergoing significant commercial development – 304,300 sq ft offices have completed this year and there is an additional 460,100 sq ft in the medium‑term pipeline. The surrounding residential communities are set to see notable growth, with potentially, up to 15,765 homes in Greenwich and up to 5,725 homes in Canada Water in the pipeline, according to Molior.
London Euston skyline

What does the future hold?​

Euston: Station-led regeneration opportunity

Euston sits at the heart of London’s Knowledge Quarter, which is a globally recognised innovation district encompassing UCL, the British Library, and the Francis Crick Institute, with the area already contributing billions to the UK economy.

Euston is a major station‑led regeneration opportunity in Central London, which has the potential to deliver a transformation on the scale of King’s Cross.

Euston aerial view

Large-scale development area

The Government’s master developer partner, Lendlease, are responsible for bringing forward development of the 60‑acre site, which has the potential to deliver up to 4 million sq ft of offices, retail and life science space, along with up to 2,000 homes and significant new public realm.
euston-02-developing-alt

Developing Euston’s ecosystem

This development will add to Euston’s existing ecosystem which hosts offices, retail, hotels, museums, and educational buildings, anchored by a major transport hub. The submarket has averaged c. 0.2 million sq ft of office take‑up per annum in the last ten years. With the supply to satisfy just over two years of average demand currently available or in the pipeline (of which just 49% (c. 0.2m sq ft) is newly developed or refurbished), further development surrounding the station should support the demand for high quality real estate in accessible and central London locations.
euston-03-train

Station-led opportunity

In the 2024 Autumn Budget, the Government reaffirmed its commitment to deliver the high‑speed rail (HS2) line to Euston and work is continuing with partners to develop an affordable station design which integrates the new highspeed rail (HS2) station, an upgraded Network Rail station and enhancements to the London Underground station, alongside the Lendlease development.
Euston housing

Lendlease and The Crown Estate

Lendlease announced in May 2025 a 50/50 Joint Venture (JV) with The Crown Estate. The JV aims to unlock science, innovation and technology space, and housing across the UK, including at Euston, providing vital infrastructure, stimulating growth, creating jobs, and benefitting local communities.
euston-05-momentum

Gaining momentum

These significant announcements are helping to rebuild momentum and unlock one of the most exciting development and regeneration opportunities anywhere in the UK.
The City of London cityscape

What does the future hold?​

Conclusion

bullseye

London has built solid foundations and a strong reputation over centuries. As a result, it has scale and momentum that is difficult to replicate.

This fuels the leading investment and occupier markets of today, creating unmatched opportunities across all property types. Global powerhouse cities will continue to drive growth and London is positioned to be at the forefront.

Change is inevitable in the face of evolving macro-trends, but London is highly resilient and always adapting. London will cope with, and in fact, capitalise on widescale structural changes and the local opportunities and challenges ahead.

London’s Future: Driving Growth Across Real Estate

Want to download the full report?

Access the full report for key insights into London, one of the world's most dynamic real estate markets.
Download the Full Report

Explore key insights from the report

Executive summary
London: A hub for growth
What drives inbound investment?
The occupational landscape
What does the future hold?

Contacts

Item 0 Item 1 Item 2 Item 3 Item 4