The writer is the policy chair and political leader of the City of London

With the Labour party settling into power, the UK is seeking to build on its economic recovery as inflation and interest rates stabilise. In the City of London, we’ve seen a particularly strong recovery in an area vital to our economic growth: the office market.

Last year, the City — comprising London’s 1.12 square mile historic centre — enjoyed 331 office leasing deals, equalling the decade-high record according to estate agent Cushman & Wakefield, allaying concerns it would experience a long-term dip due to hybrid working. Major new occupiers include HSBC, Clifford Chance and Moody’s. Encouragingly, footfall in the City continues to rise year-on-year from the pandemic era lows and frequently exceeds pre-pandemic figures in the middle of the working week. 

Among last year’s new office leasing deals, the so-called Square Mile’s highest quality, Grade-A sustainable office space, accounted for 70% of take-up by new tenants. Vacancy rates form another important part of this narrative. Since the start of 2024, central London’s office vacancy rate has hovered around 8%, according to property manager JLL. That is lower than JLL’s vacancy rates for New York City (circa 17%), Paris (9%) and Dublin (15%).

While other commercial and business districts (CBDs) are considering an expansion of residential space on account of the rise of remote work, the City of London is committed to its heritage as a CBD and to serving the evolving needs of its workers.  

Earning the commute

As the area’s governing body, the City Corporation’s planning policy is centred around creating an inclusive, accessible Square Mile that enables workers and the wider public to freely celebrate its history, while reshaping areas with the most potential for regeneration — particularly those with a higher concentration of Grade-B offices. In these areas we are working with developers to create new cultural and educational attractions, public roof gardens, galleries and enhancements to public areas that are interwoven with our new offices — 99% of which are within a five-minute walk from a rail or tube station.

This is where we stand out from other global cities: while some are mulling a work-live-play model, we are ‘earning the commute’ of our workers, as reflected by the favourable footfall and office vacancy data. In July, the Sky Garden — which sits atop one of our skyscrapers — welcomed its 11 millionth visitor since opening in 2015. 120 Fenchurch’s roof garden which recently received its 1.5 millionth visitor, as well as ‘The Lookout’ and ‘Horizon 22’ galleries in Bishopsgate both greeting more than half a million people in less than a year since opening. 

More on European real estate:

• City of London: back to the drawing room
• European commercial property deals sink to lowest level since 2010
• Rising rates redefine real estate market

Growing floorspace

A key pillar of our City Plan 2040 is to ‘power a growing, vibrant and competitive economy’ with a minimum 1.2 million square metres of additional office floorspace added by the end of the next decade. That’s around 265 football stadiums of space, which will be concentrated near the group of tall buildings — such as Heron Tower and The Gherkin — in the City’s eastern cluster. That minimum 1.2 million square metres still takes into account the hybrid working arrangements so many workers now enjoy.

The City of London is home to around 21,000 businesses, and a daytime working population of 615,000 which is projected to exceed 730,000 by 2050. Much of this will be driven by small and medium-sized enterprises in the tech and creative sectors.

The importance of delivering these spaces cannot be overstated. Contrary to the view that business districts would become deserted post-pandemic, City office space is experiencing a shortfall. This is because so many of our older buildings fail to meet modern environmental standards. Potential tenants are, by and large, only interested in occupying Grade-A office space that aligns with their brand values, as well as earning the commute of their employees, with a more pleasant working environment. 

By matching demand with supply, City authorities have granted permission to develop over 160,000 square metres of best-in-class Grade A office floorspace since 2022.

Cities around the world are looking to reinvent themselves. The City of London is combining growth, conservation and commitment to its commercial heritage to define what is unique about the Square Mile. This is ultimately at the heart of our plan for the City of the future.

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