By Eugene O’Sullivan, Director, Morgan Pryce
Whether to renew, re-gear or relocate depends on three factors: your lease event timeline, the gap between your current terms and open-market terms, and whether your building still fits how your business now works. In 2026, re-gears account for around 39% of all London office transactions — but re-gear is only the right answer if it is negotiated from a position of genuine alternatives.
Why This Question Defines 2026
Almost four in ten London office transactions are now re-gears rather than new lettings — around 1.7 million square feet of re-gear negotiations are live at any one time. That is not because staying put is always the best commercial outcome. It is because moving has become harder: fit-out costs have risen sharply, Grade A supply in core locations is critically tight, and many occupiers simply cannot find a better building at a workable price.
Landlords know this. And a landlord who believes you have nowhere to go will price your renewal accordingly. This article sets out the framework we use with clients to make the renew / re-gear / relocate decision on evidence rather than inertia.
First, The Definitions
- Renewal — a new lease of the same premises, typically at expiry, usually on updated terms.
- Re-gear — a renegotiation of your existing lease before a lease event: commonly a longer commitment exchanged for a rent-free period, capital contribution, capped service charge, or a new break option.
- Relocation — a move to new premises, with the full cost stack that entails: fit-out, dilapidations on exit, dual running costs, and management time.
The Three Tests
1. The Market-Gap Test
What would your space cost on the open market today, and what will comparable space cost you elsewhere? Prime rents grew 9.1% in the City core and 18.8% in the West End core during 2025, with forecasts pointing to roughly £93 per sq ft in the City core and £200 per sq ft in the West End core by the end of 2026. If you signed your lease in 2019–2021, your passing rent may be well below today’s market — which strengthens the landlord’s hand at renewal, but also means a re-gear negotiated early can lock in terms before the next review. Conversely, if you occupy secondary space, the market has moved against your landlord. Older buildings with weak sustainability credentials are seeing flat or softening rents and longer voids. That is negotiating leverage — if you use it.
2. The Fit Test
Hybrid patterns have broadly stabilised at three to four office days per week, and most occupiers are taking 15–30% less space than pre-pandemic but paying more per square foot for buildings that genuinely work. If your floorplate, layout or building amenity no longer supports how your team actually works, a cheap renewal is a false economy. The wrong office costs you in recruitment, retention and productivity long before it costs you in rent.
3. The Leverage Test
This is the one most occupiers get wrong. A re-gear negotiated without a credible alternative is not a negotiation — it is a request. The occupiers achieving the best re-gear terms in 2026 are those who have run a genuine parallel search, obtained real proposals on alternative buildings, and can walk away. The paradox of the re-gear market: you get the best deal for staying by being demonstrably prepared to leave.
What Good Looks Like in 2026
From recent negotiations across Central London, well-advised occupiers with genuine alternatives are achieving some combination of:
- Meaningful rent-free periods on re-geared terms
- Landlord capital contributions towards refurbishment or Cat B works
- New or improved break options
- Capped or fixed service charges
- Dilapidations settlements agreed up front rather than fought at the exit
Occupiers who negotiate alone, late, and without options typically achieve little beyond a marginally softened headline rent.
The Timeline That Makes It All Possible
None of the above works if you start too late. For requirements under 20,000 sq ft, we advise starting the strategic review 18–24 months before your lease event. Larger occupiers are now committing to space an average of four years ahead of expiry, up from under three years in 2022. Start late, and you have one option — and your landlord will price it.
The Bottom Line
Renewing, re-gearing and relocating are not three separate decisions. They are one decision, made properly only when all three options are live at the same time. In a market where 39% of transactions are re-gears, the question is not whether you will negotiate with your landlord—it is whether you will do so with leverage.
Sources & Trend Proof
1. Carter Jonas / K2 Space, London Office Market Review 2026 — re-gears at 39% of London office transactions; 1.7m sq ft under negotiation; 100,000+ sq ft occupiers committing ~4 years ahead of expiry (up from under 3 years in 2022).
2. CBRE, UK Real Estate Market Outlook 2026 — Offices — prime rental growth of 9.1% (City core) and 18.8% (West End core) in 2025; forecast prime rents of ~£93 psf (City core) and ~£200 psf
(West End core) by end-2026; renewals/re-gears elevated due to Grade A scarcity and fit-out cost inflation.
3. Interaction, Office Market Outlook 2026 — occupiers leasing 15–30% less space than pre-pandemic while paying more per sq ft for higher-quality buildings; secondary stock facing longer voids and
deeper incentives.
4. Carter Jonas, London Offices: The Outlook for 2026 — secondary buildings with poor sustainability credentials seeing flat or softening rents.
FAQs
A re-gear is a renegotiation of an existing lease before its natural end — typically exchanging a longer commitment for improved terms such as rent-free periods, capital contributions or new break options.
Renewal usually carries lower transaction costs, but relocation can deliver better long-term value if your current building no longer fits your working patterns or carries rising occupancy costs. The only way to know is to price both options in parallel.
For most SMEs, 18–24 months before lease expiry. Larger occupiers (100,000+sq ft) are now committing around four years ahead due to constrained Grade A supply.
Landlords negotiate leases for a living; most occupiers do it once every five to ten years. Independent tenant-side representation typically pays for itself several times over in improved terms.
