London AI office space leases rise tenfold in year
Office space leased by AI firms in London surged over tenfold in a year, reaching 450,000 sq ft in March 2026, with nearly half of deals concentrated near King’s Cross and Euston. CoStar data highlights strong demand for high-quality buildings, while a City Hall report estimates over a million London jobs are exposed to AI’s impact, signaling long-term sector growth.
London’s AI sector has seen a dramatic surge in office space leasing, with companies leasing over 450,000 sq ft in March 2026—more than ten times the 40,000 sq ft average from April 2025, according to real estate analysts CoStar. Nearly half of these deals were secured in areas surrounding King’s Cross and Euston, regions with strong ties to Cambridge and London’s academic institutions. The demand reflects a broader trend of AI firms establishing physical presences, with CoStar’s senior director, Patrick Scanlon, noting this marks a ‘graduation moment’ for the sector. He emphasized that AI companies prioritize high-quality office spaces, with vacancy rates for such buildings remaining low despite overall office vacancy rates still exceeding pre-pandemic levels. Major tech firms have driven this growth, including Microsoft’s recent agreement to lease the 100,000 sq ft Film House in Soho. The Knowledge Quarter in King’s Cross, home to Alphabet’s DeepMind alongside Google, Meta, and Microsoft, remains a hub for AI innovation. Scanlon highlighted London’s advantages, including access to skilled labor, venture capital, and academic clusters, which attract AI firms seeking to solidify their brand presence. The trend aligns with a City Hall report finding that over a million London jobs are ‘highly or significantly exposed’ to AI’s impact, underscoring the sector’s expanding influence. Scanlon also stressed the enduring value of physical offices for knowledge exchange and brand visibility, despite flexible work trends. This suggests AI firms view London as a long-term base rather than a speculative investment.
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