In the first half of 2025, global costs for prime office space increased by 3.4% year-on-year, driven by rising gross rents and fit-out expenses, according to Savills. The international real estate advisor’s Q2 2025 Prime Office Costs report revealed that out of 40 monitored markets, 24 saw occupier costs grow due to higher rents and refurbishment costs in top-tier buildings.
North America led with a 1.4% rise in occupier costs during Q2, supported by strong demand and high occupancy rates, especially in Miami, which recorded a 3.4% cost increase. Meanwhile, no markets in the region saw declines, with San Francisco, Los Angeles, and Chicago holding steady.
In contrast, the Asia Pacific region experienced flat overall occupier costs in Q2. However, this masks a divergence between markets: key Mainland Chinese cities saw costs drop by 2.5%, reflecting weak business confidence and ample prime office supply, while cities like Kuala Lumpur enjoyed a 4.4% rise fueled by demand from tech companies and multinational firms.
Europe and the Middle East posted a moderate 0.8% increase in occupier costs, with Paris, Milan, and Prague outperforming the regional average. Prague led with a 3.1% rise, attributed mainly to limited new supply in the market.
Savills’ Market Makers report, which examines the largest prime office deals in these 40 cities, found that businesses are expanding their office footprints. Nearly 60% of transactions involved space expansions, up from 54% in late 2024, while only 8% involved downsizing.
The trend toward premium office spaces continues as companies seek top-quality buildings to attract talent, meet sustainability goals, and enhance their corporate image. Enhanced building technologies such as digital property management, smart access, and occupancy tracking are becoming standard, with particularly strong demand for environmental upgrades in Europe, where real estate plays a key role in corporate emissions reduction strategies.
