London developers are urging ministers and planners to overhaul the rules blocking a huge pipeline of retrofit and redevelopment work across the capital’s ageing office estate.

More than half of central London’s workspace – 147m sq ft – is now classed as secondary stock and falling behind energy and quality standards.

Upgrading it could unleash £262bn of investment value and £11.4bn a year in rental income, according to new analysis by the London Property Alliance and Knight Frank.

But the sector warns the current planning and regulatory system is choking delivery.

The study shows the Central Activities Zone has already lost 14m sq ft of offices since 2018, while demand for prime, sustainable space is surging and availability has dropped to historic lows.

With companies seeking 10m sq ft of top-grade floors, the Alliance says that breaking the logjam on redevelopment is now essential to keeping London competitive.

The report argues that major office schemes should be treated as critical economic infrastructure to give them greater weight in planning decisions.

It also calls for planning authorities to strip back costly obligations and streamline regulatory requirements to help schemes stack up financially.

Without reform, the Alliance warns that scores of buildings with EPC ratings of C–F will fail 2030 energy rules, leaving London with a swelling pool of obsolete stock while occupiers intensify their flight to quality.

Take-up of prime space has jumped 727% since 2020, while demand for poorer Grade C floorspace has plunged 73%.

Grosvenor Property CEO and Westminster Property Association Chair James Raynor said: “The significant volume of ageing office stock is a threat to future supply unless the barriers to upgrading it to the high quality, sustainable workspace businesses need are addressed.”

Landsec’s Ross Sayers added: “Rising construction, labour and finance costs, combined with expanding planning obligations, are creating financial pressures that too often tip the balance against intervention.”

Knight Frank’s Shabab Qadar said the issue is now systemic, with regulatory hurdles and development viability undermining delivery at exactly the moment London needs to modernise its commercial core.