Office tenants across the Nordic and Baltic capitals are renewing leases while taking less space, as smaller businesses increasingly favor shorter commitments and demand concentrates in prime buildings.
A 25-year analysis by commercial property advisor Newsec, covering seven capitals and millions of lease records, finds that office demand is becoming more selective. The trend predates the pandemic, with tenants reducing their footprints even when they remain in the same buildings.
Prime Offices Have Lower Vacancy Than Older Buildings
Grade A offices have lower vacancy rates than the overall market in six of the seven capitals studied. Stockholm’s prime vacancy rate is 4.6%, compared with 13.6% across its total office market. Helsinki has a similar gap, at 5.8% versus 15.3%.
Vilnius is the exception, with Grade A vacancy at 9%, matching the overall market rate. Newsec attributes this to new office supply entering the market.
Smaller Tenants Sign Shorter Leases and Give Back More Space
Lease commitments increase with tenant size. In Finland, businesses occupying less than 100 square meters sign leases averaging about one year, compared with 5.5 years for tenants occupying more than 1,000 square meters.
Smaller tenants also retain less space when renewing. Businesses leasing under 100 square meters renew an average of 39% of their existing space, compared with 76% among tenants occupying at least 3,000 square meters.
Across the market, renewing tenants have returned an average of 16% to 19% of their space since around 2016, even when staying in the same building.
Most Swedish Office Space Stays With Existing Tenants
In Sweden, approximately 71% of office space is retained at each three-year lease renewal, while 29% turns over to new tenants.
Renewal rates vary by industry. Public-sector tenants renew 82% of their space, compared with 59% for law firms, 55% for technology and software companies, and 48% for staffing and recruitment businesses.
New lease sizes have also fluctuated. In Finland, the average fell from 344 square meters in 2021 to 250 in 2024, before rising to 415 in 2025 as several large deals increased the average. In Norway, average lease size has roughly halved since 2007, while the median has remained relatively stable.
