The appeal of London
A healthy occupational market is essential to sustain the investment market, and London has many qualities which engage residents and businesses, attracting them to occupy space.
The city offers the assets, lease structures, and options for owner-occupation to suit a range of preferences. London’s submarkets have developed their own identities through their cultural positioning and industry clusters, and each offer an individual experience.
From a business perspective, corporate real estate is seen as an increasingly important lever for achieving strategic objectives by the C‑Suite. According to fDi markets data, just under 7,000 companies have invested in 7,693 London‑based business activities since 2003, stimulating the creation of over 300,000 jobs. Their data illustrates that the companies investing in London are most frequently choosing it to host business services, sales, marketing, and support, but London also serves a wider range of projects. It has been selected by companies from a broad range of industries and origin countries, demonstrating its diverse appeal and competitive market.
Figure 9: Investment in business activities in London (by number of projects), January 2003 – August 2025
What actually drives corporate occupiers’ decisions?
London is not the most affordable occupational market but is repeatedly chosen ahead of other cities.
According to fDi Markets, companies most commonly cite proximity to markets, customers and domestic growth potential as their motives for choosing London, followed by industry clustering and talent availability.
This proves that the scale and depth of industry and skill in London is reinforcing occupational decisions as organisations and new talent are drawn towards existing hotspots of activity.
Figure 10: Investment in business activities in London, January 2003 – August 2025
Leading city for tech HQs in the last five years
Headquarters in particular require the best possible access to talent, to customers, and to market growth opportunities, and communicate the brand of an organisation. It is one of the most important real estate decisions for a commercial occupier.
London proves a desirable headquarter location for a broad range of industries including long‑standing sectors. fDi Markets data shows that since 2003 there have been 878 headquarters established, more than many other large global cities such as Singapore, Paris, and New York.
Figure 11: Investment into headquarter activities in a selection of cities, January 2003 – August 2025
Of the sector‑level data available, more than 90% of the activity sat within 11 core industries. Software & IT Services was by far the leading sector which aligns with the surge in productivity for the tech sector seen in London during the last decade. It also exemplifies the urbanisation of innovative sectors.
London has ranked as the leading global destination for headquarter investment in the software and IT services sector in the last five years (2020‑August 2025). This demonstrates the local strength of the tech sector but could also indicate London’s wider appeal to emerging sectors looking to establish their flagship office.
Figure 12: Leading industries investing in headquarter activities in London, January 2003 – August 2025
Economic dynamism is reflected in office demand
London’s varied tenant base is reflected in the office leasing market data. For example, the City market clearly demonstrates the broadening of industry activity over time.
This led to a reduction in the historical dominance of banking and finance occupiers (who acquired 57% of the total space‑take in the 1980s, compared to 26% in the 2020s to date), driven by the creative and consumer sectors growing their real estate footprints.
Throughout the forecast period (2026–2029) we expect further growth in Central London office‑based employment to be driven by the professional and technical sector (+65,400 jobs), tech, media, and telecommunications (+44,000) and admin and support (+33,900) which could be reflected in future take‑up.
Figure 13: London City office take-up by business group
*Data from Q1 1984 onwards
Strong business activity supports broad property markets
Productivity and strong business performance in London has supported the establishment of large and diverse property markets, which has in turn created resilience for investors.
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World-renowned retail
Luxury shopping streets have seen exceptional growth in prime rents – New Bond Street is more than triple the 2010 level, and Sloane Street more than double. Prime rental values on Oxford Street and Regent Street have also increased significantly by 52% and 80%, respectively. Vacancy rates on key shopping streets are tight and we expect this to continue.
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#1 market in Europe for hotel investment in 2025
Investors are attracted by factors including the size and liquidity of the London market which is fuelling strong investor sentiment.
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Largest European data centre market
One of only two markets in Europe with over 1GW of operational data centre supply as of Q3 2025. We expect record take‑up of 193MW in London this year.
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Multifamily sales have significantly bolstered living investment
Living transactions in London have achieved three times greater volumes in the last five years (2020‑2024) compared to the five years to 2014. During this time the multifamily sector has become an established and actively traded asset class which has driven the increase.
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The life sciences ecosystem is ranked third best in the world
London has a number of established science and innovation clusters in which the life sciences sector is highly active. It is receiving investment into state‑of‑the-art facilities such as One North Quay which once complete, intends to include lab space outpacing any other building in Europe.
