London AI office space leases rise tenfold in year

The amount of office space leased by artificial intelligence (AI) firms in London has increased more than tenfold in the past year, figures show.

Last month, more than 450,000 sq ft of office space was leased by companies whose core business is the creation of AI models, the data from real estate analysts CoStar found. The average across 2025 was 40,000 sq ft.

Almost half of deals were done for offices in the areas around King's Cross and Euston stations with good links to Cambridge and London's education providers.

Patrick Scanlon, CoStar's senior director of market analytics, said: "It's almost a graduation moment in terms of offices for the sector... This isn't looking like a bubble."

He added: "We're hearing from people in the market that there is a lot of latent demand from AI firms in the market."

Last month, a City Hall report found at least a million jobs done by Londoners were either "highly or significantly exposed" to the impact of AI.

Although office vacancy rates in the capital are still higher than pre-Covid levels, the rate for "really good quality buildings with appropriately large floor plates is quite low", Scanlon says.

In April 2025, less than 50,000 sq ft of office space was being leased by AI companies. By March 2026, that had risen to 250,000 sq ft.

The so-called Knowledge Quarter in King's Cross is home to Alphabet's AI division DeepMind, alongside Google, Meta and Microsoft.

Microsoft recently agreed to lease the eight-storey Film House in Soho, which is 100,000 sq ft.

London still has good access to skilled labour, venture capital and the ability to cluster around knowledge centres, according to Scanlon.

He added: "The other really important point in flexible working arena is the idea of an office as a physical representation of your brand never went away, so a lot of these guys want a presence in King's Cross to show they're here to stay.

"There is still a desire to exchange knowledge and be around each other."

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