CoStar Group Inc. Reports Resurgence in Occupier Demand for Southbank East Offices

According to CoStar's analysis, the fourth quarter of 2025 saw annual net absorption in Southbank East surpassing 200,000 square feet. This achievement represents the strongest quarterly performance for the submarket in over a decade. The previous two years had been challenging, characterized by a surge in new office space deliveries that began in late 2023, which coincided with a noticeable slowdown in leasing activity.

The growing demand is a hopeful sign for the Southbank East area, which had been grappling with a vacancy rate that reached a 12-year high of 11.5% at the beginning of 2025. This is a stark contrast to the less than 2% vacancy rate witnessed in 2019, illustrating the dramatic shifts in the market dynamics.

Patrick Scanlon, Senior Director of Market Analytics at CoStar Europe, attributed this resurgence in demand to a "wave of development completions." Between 2020 and 2025, almost 1 million square feet of new office space was delivered, a substantial increase compared to the preceding five-year period, where only one-fifth of that amount was introduced to the market.

Scanlon noted: “Occupiers seeking larger floorplates are likely to find fewer options than expected in Southbank East, as the vacancy rate for floorplates larger than 15,000 square feet is just 8.3%, compared with a London-wide vacancy rate of over 12%.” This scarcity may drive competition among businesses looking for larger office spaces, as the demand for these specific configurations surges.

Despite the delivery of more than 1.3 million square feet of office space since 2020, with over 20% currently available, ongoing developments are beginning to show signs of improved performance. Notably, around 25% of the floorspace under construction has been pre-let, which is on par with the performance seen across Central London, where the pre-letting rate is just under 30%.

This trend suggests that while the overall vacancy rate remains elevated, specific sectors of the market are demonstrating resilience and adaptability, responding to the evolving needs of occupiers.

CoStar Group's latest findings indicate that Southbank East is on a path of recovery, fueled by increased occupier demand and strategic development initiatives. As the commercial real estate market continues to navigate post-pandemic challenges, insights from CoStar will remain crucial for stakeholders looking to make informed decisions in this dynamic environment.

For more detailed insights, the full analysis is available through CoStar Group's official channels. As a leader in commercial real estate information and analytics, CoStar Group remains committed to providing valuable data that empowers businesses and enhances their operational efficiencies in the property markets.