The London Property Alliance (LPA) is calling for offices to be designated as critical infrastructure in the National Planning Policy Framework (NPPF), as a critical shortage of modern office space risks “choking” economic growth.
London ranks first globally for foreign direct investment
The LPA said office-based sectors across London generate close to £290bn in gross value added (GVA) each year.
LPA chief executive Charles Begley said: “Offices are critical economic infrastructure. Designating them as such in the NPPF, giving schemes the same planning weight as data centres and gigafactories, would be a decisive and low-cost intervention that unlocks growth, creates jobs and keeps London globally competitive.”
The LPA report found that London’s Central Activities Zone (CAZ) has lost 14m sq ft of office floorspace since 2018, with Westminster accounting for more than 7m sq ft lost.
Major planning applications in Westminster fell 75% between 2013 and 2024, contributing to a projected shortfall of nearly 11m sq ft over the next five years.
With vacancy rates in the West End falling to just 0.8%, the industry group warned that office supply in the capital is failing to meet the needs of modern occupiers.
The LPA’s latest Global Cities Barometer ranked London as the world’s leading destination for foreign direct investment (FDI), attracting 86 FDI projects in the most recent quarter – more than double its closest competitor Hong Kong (36) and nearly seven times more than Berlin (13).
However, Begley said London is “in danger of winning the race for investment and then failing to provide the commercial space required for growth”
He added that central London faces “a serious shortage of modern workspace that global businesses require to deliver their growth strategies”, leading to occupiers renewing their leases “because there is nowhere else to go”.
Prime West End office rents rose 15.8% in 2025, the strongest of any global city analysed by the association, reflecting the supply and demand imbalance. The area’s 0.8% vacancy rate compares to London’s overall availability of 7%, while vacancy rates in Manhattan sit above 20%.
The low quality of existing stock adds to the challenge, with over half of the office space in the CAZ classified as ‘secondary’. The report states that upgrading this stock to prime grade-A standard could unlock £84bn in economic output over the next decade.
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