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Microsoft is actively searching for a new headquarters in London, as insurance broker Lockton and trading firm Jane Street also look to establish fresh bases in the City, amidst a scarcity of premium office spaces in the UK’s capital.

The American tech behemoth is targeting locations along the Elizabeth Line, stretching from Paddington on the western side to Canary Wharf in the east, according to insiders familiar with the situation.

Microsoft is reportedly seeking a space ranging from 200,000 to 250,000 square feet and has engaged in discussions with developers and real estate companies in recent months, the sources indicated.

Advised by CBRE, Microsoft, which operates offices in Paddington and Victoria and employs approximately 6,000 people in the UK, is evaluating its options.

“We remain dedicated to the UK and maintain facilities nationwide. We routinely assess our portfolio to ensure it aligns with our staff’s needs and our long-term business objectives,” a Microsoft representative stated. CBRE opted not to comment.

Finding high-quality space in London is proving a challenge for large companies, which generally want new or revamped buildings that offer amenities such as terraces, gyms and juice bars.

They also want proximity to transit networks, with the Elizabeth Line a particular draw. Sites along the Elizabeth Line have become more attractive to big companies as the railway has improved access to suburbs that were previously less well connected to the centre of the capital.

Real estate broker Knight Frank has forecast that the vacancy rate for the highest-quality London office space will drop to zero by 2028 and will stay there in 2029.

Meanwhile, so-called office net absorption, or the change in the amount of office space occupied over a set period of time, turned positive last year for the first time since 2019, according to real estate data provider CoStar Group. A positive measure indicates rising tenant demand.

The last three months of 2025 were the strongest quarter for office net absorption since the April to June period in 2019, with 1.9mn sq ft more space occupied than vacated, according to CoStar data.

Meanwhile, US insurance broker Lockton is nearing a deal to take a couple of hundred thousand square feet of space at 50 Fenchurch, according to people familiar with the matter.

No deal is guaranteed and Lockton could opt to take space elsewhere, the people cautioned. Lockton and BNP Paribas AM Alts, which is developing the site, declined to comment.

Separately, Jane Street is in talks to take space at 75 London Wall, the former Deutsche Bank headquarters, which will offer about 475,000 sq ft when it is completed in early 2028.

The building would serve as the trading firm’s European headquarters if a deal is agreed, although it is also looking at other options, according to people familiar with the matter. Jane Street and Castleforge, the building’s developer, declined to comment.

Jane Street’s interest was previously reported by Green Street News. 

The lack of space is forcing many companies to stay where they are. Macquarie is the latest in a string of blue-chip companies to do so, according to people familiar with the matter. The FT previously reported that the Australian bank and investment group was looking for up to 250,000 sq ft.

Taking the best office space has its price, however. Occupier costs, which include rent and fit-out costs, rose more than 4 per cent in London’s West End in the fourth quarter of last year compared with the previous three months, according to Savills.

Additional reporting by Lee Harris and Jill Shah