The Square Mile Builds Again as Office Demand Hits a Decade High

For all the debate about remote working and shrinking office footprints, the Square Mile has been moving in the opposite direction. The demand for office space in the City of London has reached its highest level in a decade, a shift revealed not by bold declarations but by the steady flow of planning applications passing through Guildhall.

In 2025, the City of London Corporation received more planning applications than in any year for ten years. More striking than the volume alone is what has been approved. Over half a million square metres of office floorspace has been granted planning permission, the equivalent of more than seven Gherkin-sized buildings. Around half of that space is already under construction, suggesting conviction rather than caution.

This is not speculative development driven by optimism alone but reflects a market that has tightened sharply at the top end. While overall vacancy across the City sits at around seven per cent, the picture looks very different for the newest and best buildings. Grade A towers are close to full, and the Square Mile’s largest office building, 22 Bishopsgate, is now entirely occupied. For property professionals, that single fact has come to symbolise where demand is now concentrated.

The cranes reshaping the skyline are attached to familiar addresses. 1 Undershaft is already under way, while major developments at 85 and 60 Gracechurch Street are expected to begin early in 2026. Together, they point to a City planning several years ahead, rather than reacting to the latest economic cycle.

Policy has evolved alongside construction. The City’s long-term planning framework, City Plan 2040, is now in its final consultation stage and is expected to be adopted in the first half of next year. Sustainability has become central to that approach. Around half of all planning applications received in 2025 were for retrofit schemes, signalling a clear preference for upgrading existing buildings rather than replacing them outright. This mirrors a wider shift across the profession, examined regularly in the Architects’ Journal, as London looks to reconcile growth with the pressure to cut carbon.

The effects of this development cycle extend well beyond office floorspace. Over the past decade, planning approvals have generated more than £400 million in contributions. These funds have helped pay for major infrastructure projects, including the Elizabeth Line, supported affordable housing schemes in neighbouring boroughs and funded public realm improvements such as Finsbury Circus Garden and the Greyfriars Square project.

There are also changes that are less visible but keenly felt at street level. Recent planning approvals include ten new public walkways through the City, particularly around Bishopsgate, Old Broad Street and Liverpool Street. These routes are intended to ease congestion, improve access to stations and open up clearer views of City landmarks, quietly reshaping how the Square Mile is navigated each day.

Tom Sleigh, Chairman of the City of London Corporation’s Planning and Transportation Committee, believes the figures point to a deeper confidence in the City’s future.

“This record-breaking year proves one thing: Britain’s central business district is booming,”

he said. “The Square Mile remains the nation’s engine room for investment growth, and the pace of demand is only accelerating.”

He added that the schemes now under way should be seen in a broader context. “These are not just buildings but commitments to Britain’s economic future. Our planning pipeline is helping shape a City that is more sustainable, better connected and ready for the next generation of businesses.”

At a time when the future of office life continues to be debated elsewhere, the Square Mile appears to have reached its own conclusion. Demand has not disappeared. It has sharpened and focused. The result is a renewed phase of building that feels less like a boom and more like a long-term bet on London’s enduring role as a global centre of work.

Is the Square Mile right to double down on offices when other cities hesitate? Read more of our Square Mile planning and property coverage on EyeOnLondon City, and share your view.

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