London’s status as Europe’s go-to destination for corporate headquarters is at risk, top developers and investors warn, as the City of London faces a growing office space shortage.

The UK capital attracts three times as many European headquarters as any other European city, according to new research by the London Property Alliance (LPA), which represents leading property owners, developers and investors. 

The number of head offices in London surged by 84 per cent between 2019 and 2025, according to the LPA. The city attracts three times as many European HQs as any other on the continent.

London ranks second only to Singapore in the world for the value of foreign investment in headquarters between 2003 and 2025, attracting $13.9bn. 

The capital hosted 3,185 head offices as of last year, compared to 1,735 in 2019. The number of people employed in London’s headquarters surged by 64 per cent between 2019 and 2023, according to the LPA, compared to a 10 per cent jump in employment in the city as a whole.

Howard Dawber, London’s deputy mayor for business and growth, said: “The Mayor and I are proud that London remains Europe’s leading corporate headquarters destination, a place where businesses want to invest in offices for people to do important work but also enjoy the wider cultural offer of our great city.”

These figures are “a huge vote of confidence in the capital’s future, and a testament to our enduring status as a global centre for innovation and enterprise,” he added.

But the LPA warned that London’s position as a hub for global headquarters is at risk from the growing shortage of office space in the capital’s most in-demand areas, like the Square Mile and Canary Wharf. 

London offices are ‘in short supply’

Office vacancy in London’s most sought-after locations ranges from zero to 0.8 per cent. Property developers have warned that this leaves global firms with few options to expand their existing headquarters or find new office sites. 

James Raynor, chair of the Westminster Property Association, which is part of the LPA, said: “Businesses continue to choose the capital to invest, expand and grow. But in an increasingly competitive global market, we cannot afford to become complacent.”

The LPA, which also includes the City Property Association, has urged the government to designate key office developments as critical economic infrastructure to fast-track their planning approval.

The property developers also urged the government to address rising building costs and the red tape that blocks construction projects. Multiple builders have warned in recent months that projects in London are becoming unviable.

Raynor said: “The modern offices that international businesses want, in the locations they want to be, are in increasingly short supply. We urgently need to address the rising costs and barriers holding back development and unlock investment in new and upgraded workspace.”