The Modern Tenant Mindset

In the six years since Covid, the office market has changed at a faster rate than possibly in the previous 60. Go back 20 years and the office world was black and white, two distinct markets with long leases on one side and Regus on the other. Fast forward to today and there is now one unified office market with typically shorter leases on one side, over one hundred serviced offices on the other and a middle ground of managed solutions in between. Whatever an occupier is looking for and wherever they're looking, there's likely a solution to match. But in 2026, what's driving demand?

The Moving Market

Post 2020, the future of the office was in doubt. Video conferencing had become common place, some employees had fully embraced home working by moving to locations further from the office and the mainstream media was an endless run of articles about how the office as we knew it was dead. Then, slowly but surely, the tide began to turn as occupiers called their staff back to the office. Some (typically financial) 5 days a week. From the conversations we have with clients day to day, the majority have settled on 3 or 4.

6 years on from Covid and businesses are still struggling to get to grips with what structure works for them. HSBC being the posterchild of making the wrong call, giving up 1.1m sq ft at 8 Canada Square in Canary Wharf for 556,000 sq ft at Panorama St Paul’s in the City, only to then need a further 210,000 sq ft as they updated their hybrid model. The only place they could find it? Back at Canary Wharf...

They're not the only ones to be caught out. The stream of articles about 'the future of the office' seems to be etched into the public consciousness. On a near daily basis, we at Office Freedom have conversations with clients who are under the impression that London has a glut of vacant offices and in part, they're right, but as the saying goes, the devil is in the detail.

At the end of Q2 2026, Knight Frank recorded total office availability across London of 21.6m sq ft, or 8%. However, vacancy for new space is just 1.6% and for refurbished space 4.4%, and this is the space everyone wants. Second hand availability has contracted to 1.9%, against a long term average of 3.5%.

The Shift in Occupier Sentiment

To entice and attract staff back to the office away from the carefully curated, perfect work environment at home, occupiers realise that they need an office staff want to come to. That means perks and facilities and a great working environment and competition for that space is now greater than ever. The same is true in the flex world, with occupancy according to WIN sitting at 83.8% across London in the six months to March 2026, and above 87% in the West End and City Core.

The buildings best capturing the return to the office demand are those offering facilities staff actually value. Workthere’s survey found UK occupiers rank collaboration space as the single most sought after feature, ahead of meeting rooms and phone booths. Gyms, yoga rooms and wellness spaces help employees balance health and work more easily, while breakout areas and modern kitchen facilities are now widely expected as part of a well-rounded workplace experience.

Flexibility Is Now the Baseline

Given how quickly requirements have evolved, flexibility has moved from a benefit to a baseline requirement. Occupiers are actively seeking workspace solutions that allow them to scale up, reduce, or adapt as their business evolves.

Larger companies are now seeking space in serviced offices, which are increasingly seen as a comparable alternative to a traditional lease. Workthere’s survey puts global corporates at 26% of flexible office take up across Europe, the Middle East and Africa, with demand from that group accelerating. The rise of the managed market, with similarly flexible terms, further reinforces the demand from occupiers for flexibility.

For more information about the available options, read our guide to serviced, managed and traditional leased office space.

Economic headwinds, a(nother) new prime minister and the rise of AI are all driving occupiers towards flexibility. The AI question in particular comes up constantly.

Our guide to flexible office agreements explores how occupiers can build resilience in an uncertain market.

Sustainability and ESG Expectations

Sustainability continues to feature highly in occupier considerations, however in the light of increasing rents, perhaps not as highly as it once was. ESG commitments however remain embedded in corporate strategies, so occupiers are prioritising buildings that align with environmental goals and will reject those deemed to detract from the agenda.

Energy efficient buildings, strong EPC ratings, green certifications, and low carbon design continue to influence office choice, particularly in London and other major UK cities. This reflects both regulatory pressure and growing corporate responsibility.

Data and AI in Workplace Strategy

Technology is reshaping how offices are used and managed. Occupiers are increasingly focused on how efficiently space operates, not just where it is located, and mindful of how AI might change their office footprint in the future.

Workplace analytics, occupancy sensors, and AI driven planning tools are helping businesses understand usage patterns, reduce wasted space, and improve efficiency. The limitation is that they describe how a building is being used today. They say nothing about how many desks a business will need in 2029.

Most of the commentary on AI and offices is about AI businesses taking space, which is a story about a small number of very large occupiers. What the rest of the market is actually wrestling with is what AI does to their own headcount, and therefore how much space they should be committing to. We are seeing it change what occupiers ask for rather than what they take. More weight on break clauses, expansion and contraction rights, and the ability to move within a building. Less on securing the lowest headline rate. A business that cannot forecast its headcount three years out will pay for the option to change its mind, and increasingly it does.

What This Means for Businesses in 2026

Office demand in 2026 reflects a clear shift in occupier priorities. Best in class, or close to best in class buildings are attracting occupiers. Flexibility is now a baseline expectation, hybrid working continues to shape decisions, and workplace experience is central to attracting and retaining talent.

For businesses, office decisions are no longer just about size or location, but about finding space that supports performance, adaptability, and people needs.

Given the tightening market demand, rising rents and greater competition for space, along with a huge range of choice in solutions and providers across the market, representation and advice has never been more important. At Office Freedom, we work closely with occupiers to understand their requirements and help them find flexible office solutions that support growth, employee experience, and long-term strategy.