The UK office market has long depended on steady demand from banks in the City of London, professional services in regional centers, and media companies in western hubs. Central London, however, is experiencing a dramatic transformation, with artificial intelligence reshaping tenant priorities.
By mid-2026, tech and media firms now occupy 31% of central London’s office space—a 64% increase over their historical average and the highest share since 2017. Nearly half of this demand stems from AI-focused businesses, according to Savills data. Matthew Bonning-Snook, CEO of Helical, notes that tech’s share of central London take-up jumped from 7% in 2025 to 25% in the first half of 2026. At The Bower in Old Street, over 80% of current interest comes from technology companies, while even the traditionally finance-dominated City now sees 12% of inquiries from tech firms.
This shift involves more than just AI startups. Many of the fastest-growing tenants are established companies, security firms, e-commerce platforms, and software providers, that are leveraging AI to expand operations. “They emphasize the AI component as their fastest-growing segment,” Bonning-Snook states.
Tech firms clash with slow-moving property market
Underlying this growth is a resurgence in venture capital funding, providing tech firms with the capital needed to scale quickly. This creates tension with the property industry, where developments take years to complete and leases often span decades. Tech companies now require space on accelerated timelines, such as 100 desks within three months—with plans to double capacity in six to nine months.
This mismatch is fueling demand for flexible workspaces. Savills reports that serviced office providers acquired 338,000 sq ft in central London during the first half of 2026, a 16% increase from the same period last year. Young tech firms prefer these spaces to avoid upfront property investments. “They’d rather allocate funds to AI expansion than office fit-outs,” says James Evans, an executive director at Savills.
Traditional landlords are also adjusting. Charles Owen, head of portfolio management for Regent Street at The Crown Estate, observes that occupiers now seek much larger fitted offices, typically 35,000 to 40,000 sq ft—compared to the 10,000 sq ft standard of the past. This shift requires landlords to function more like service providers than passive property owners.
Helical is responding by reusing furniture and offering customized office solutions at The Bower. “The fitted option is where most tech firms want to move after leaving serviced offices,” Bonning-Snook explains.
Buildings now must adapt to AI’s infrastructure demands
Beyond leasing terms, developers must now design buildings to meet AI-driven business needs. Nathan Watt, development director at Delancey, highlights that flexibility must extend to physical infrastructure, power requirements, cooling systems, and data resilience often take precedence over design aesthetics. “It’s not just about the building’s appearance; it’s about aligning with how businesses operate,” he says.
A prime example of this transformation is Delancey’s revised plans for 176-178 York Way in King’s Cross. Originally approved as a life sciences wet-lab facility, the project now accommodates conventional offices, lab-enabled spaces, or a hybrid of both. The changes reflect the need for adaptability in an industry where AI, technology, and life sciences demand is evolving rapidly. The scheme’s flexibility, approved at 200,000 sq ft—allows for rapid reconfiguration based on tenant requirements, whether for AI research teams, software developers, or biotech firms.
Beyond London, the UK’s office market remains anchored in traditional demand. Savills data shows that outside the capital, professional services and the public sector continue to dominate take-up in regional cities. Evans notes these sectors have long sustained office demand, particularly in Manchester, Leeds, and Newcastle. However, tech-driven demand is gradually rising in these areas due to lower costs, proximity to universities, and a growing tech workforce. While the shift is slower than in London, it signals AI’s influence will eventually spread nationwide.
