Prime office occupiers will continue to see rising overall costs in 2026, as take-up is set to increase in many markets.
Contents
International demand from diverse occupiers for best-in-class offices and limited changes to landlord incentives reinforced premium pricing in major business markets. Across the 40 cities we analyse in this report, prime office occupier costs rose by 1.1% in Q4 2025, bringing the year-on-year change to 5.1%. A 0.8% uptick in both gross rents and fit-out costs drove the increase.
Over the past two years, net effective costs for best-in-class office space have risen significantly across most of the 40 markets we track, with a global average increase of 9.2%. In this report, we explore the drivers of this growth, examine key regional dynamics and highlight the structural differences emerging across major business hubs. We conclude with insights from our global outlook for 2026.
Focal points:
- In Q4, average net effective occupier costs increased by 1.1%, continuing the upward trend to 5.1% over the past 12 months.
- Stand-out markets include Mumbai (8.0%) and Miami (7.2%), where tight supply and steady demand have driven sharp cost growth.
- On a global average basis, prime office rents and uptake are expected to continue to rise throughout 2026.
Quarterly highlights
Across the 40 cities we analyse, 24 had increases in net effective occupier costs this quarter, driven by rising gross rents and fit-out cost pressures. Regionally, Asia Pacific rose by 1.1%, EMEA by 1.0%, and North America by 1.2%.
The Asia Pacific region registered a 1.1% overall cost increase this quarter, despite decreases in China.
Across the four mainland Chinese hubs we monitor, occupier costs declined by 1.1% this quarter. The pace of decline has moderated compared with previous quarters (net effective costs fell by 1.9% in Q3 2025). While an oversupply of prime space and soft business and consumer confidence remain, a stabilising economic outlook may temper the rate of further cost decreases.
By contrast, occupier costs increased in many other Asian markets. In Tokyo, vacancies in prime buildings remain near 0%. As a result, landlords have cut incentives like the abated rent period, falling from an average of six months over a five-year term to just eight weeks over the same lease period. Mumbai saw 8% cost growth this quarter, underpinned by high demand for client-facing office space on high floors in best-in-class stock.
Europe and the Middle East saw a 1% increase in net effective occupier costs. London’s West End had a 4.2% rise as strong demand for space supported record-high rents. With development completions expected to fall by over a third in 2026, this trend is likely to continue.
Dubai saw a 1.7% increase in prime office occupier costs in Q4 2025, driven by prime rent rises and slowing incentives. Grade B rents have risen at a much faster pace than prime office rents. With the current constrained supply in the city, some landlords have sought to maximise rents on short lease terms, with rents on short-term Grade B leases being up to 77% higher than long-term leases for prime space. With new supply coming through, this dynamic will taper off.
North America saw the fastest net occupier cost rises this quarter, averaging 1.2%. Most of the US markets we track posted moderate increases driven by gross rent rises and slight declines in landlord concessions. With costs rising by 7.2%, Miami had one of the highest increases in Q4 2025 globally. As a leading Florida business hub, Miami has attracted heightened interest from international occupiers seeking alternatives to traditional US centres such as New York. A notable trend in Miami is the emergence of micro-HQs, with occupiers favouring smaller, high-impact spaces as they prioritise brand, identity and visitor experience over scale.
2026 outlook
Shifting prime office markets, evolving trends in supply, strengthening rental growth and the emergence of innovative PropTech solutions marked activity in 2025.
As we look ahead, we surveyed the Savills global research network to understand how the prime office market will to perform this year, together with the thematic drivers that will shape real estate in 2026.
2026 is anticipated to be another year of increasing costs amidst rising take-up. 89% of respondents expect prime office rents to rise, and 82% expect leasing volumes to increase in 2026. Of those anticipating rent increases, the majority (55%) forecast 2-5% rent increases in their markets, while 11% expect to see rental increases exceeding 5%. A smaller majority (39%) believe that that take up will rise by between 0 2%.
Only 11% of markets expect rents to fall in the prime office sector, concentrated in China, where we have already seen consistent declines. On an annual basis, our four prime office cost markets in mainland China have seen net effective cost declines of -7.2%.
For occupiers, economic and demographic forces are set to remain the most important market drivers this year. Cost concerns balanced against the need to access top global talent will continue to challenge occupiers, with careful city and site selection paramount.
Technological and geopolitical concerns have each risen a position in our ranking of the most important occupier market drivers in 2026, as more respondents are prioritising PropTech-enabled spaces and flexibility and adaptability in their portfolios. Innovation and deeper integration of AI into smart building systems have the potential to enhance outcomes for both landlords and occupiers in prime assets, although this brings with it heightened cybersecurity risks that will need to be actively managed.
Environmental concerns ranked as the fifth most important thematic factor, having fallen two places in our rankings. In many markets, environmental standards are integral to what defines a prime building. Environmental considerations are increasingly considered a hygiene factor, which may explain why environmental concerns have fallen two places since last year. Regional differences in the prioritisation of environmental impact also play a part, with the European markets still ranking the factor highly, standing at fourth place on average across the region.
METHODOLOGY
The Savills Prime Office Cost (SPOC) Index presents a quarterly snapshot of occupancy costs for prime office space throughout the world, as provided by our expert, local tenant representation professionals and researchers.
The adjusted annual all-in occupancy cost represents real-time transaction terms for 20,000 sq ft (2,000 sq m) of usable space based on a basket of the top five most expensive properties to calculate ultra-prime average. The North American markets use a sample of very high rent threshold buildings (leasing occurring at the highest end of market).
All costs are reported in an annual, standardised format of USD per sq ft of usable space to account for variations in currency, reflect local payment protocols, and adjust for measurement practices across the globe. We have also factored in the credit value to the tenant generated from abated rent and the cost associated with fitting out the premises in order to provide an ’all in‘ total occupancy cost in USD per usable square foot.
The fit-out costs were gathered from local Savills teams assuming the leasing scenario described above, plus the following:
i) 30% cellularisation with the remainder of space open plan,
ii) construction and cabling only (no furniture or professional fees).