Across our 40 global cities, prime office occupier costs rose by 0.8% in Q3 2025, bringing year-on-year (YoY) growth to 3.3%. A 0.9% uptick in gross rents drove the increase, while fit-out and associated costs remained flat (0.03%). Strong demand for best-in-class offices and limited changes to landlord incentives are reinforcing premium pricing in major markets. 

Over the past five years, gross rental values for best-in-class office space have seen significant growth across the majority of our markets in this report, except for outliers like those in mainland China. In this report, we examine global growth, spotlight key regional dynamics and highlight the structural differences playing out across our 40 major business hubs.

Contents

• Quarterly Highlights
• Regional Rental Growth Trends
• Key Markets Comparison
• Methodology

Focal points: 

• In Q3, average net effective occupier costs increased by 0.8%, continuing the upward trend to 3.3% over the past 12 months.
  
  
• Stand-out markets included Tokyo (5.3%) and Kuala Lumpur (6.5%), where tight supply and steady demand drove sharp cost growth.
  
  
• Globally, gross rents are steadily rising, although there is significant variation in the rate of change by region. 

Quarterly highlights

Of the 40 cities we track, 25 registered growth in net effective occupier costs this quarter, driven by rising gross rents and fit-out cost pressures. Regionally, Asia Pacific rose by 1.0%, EMEA by 0.9%, and North America by 0.6%. 

The Asia Pacific region continues to diverge sharply. The four mainland Chinese hubs we monitor contracted by -1.9% this quarter, with Shanghai falling a significant -4.6%. Here, chronic oversupply of prime space and soft business and consumer confidence remain headwinds. In contrast, many other Asian markets delivered strong growth. In Tokyo, vacancies in prime buildings are at historic near 0% lows, enabling significant rent increases. Also noteworthy: Kuala Lumpur recorded 6.5% cost growth this quarter, underpinned by high demand for best-in-class stock.

Europe and the Middle East saw 0.9% net effective cost growth, and no markets declined this quarter. Frankfurt led with growth of 3.6%. Its limited supply of large floorplates in prime buildings supports rent growth. In the MENA region, cost growth was robust, with Dubai achieving 2.1%, Riyadh 2.0%, and Cairo 1.6%. In these hubs, multinational occupiers compete for best-in-class space, keeping vacancy low and cost growth strong, in Riyadh for example prime office vacancy has been consistently 1% for the previous four quarters. Growth was subdued in many European markets amid broader macroeconomic uncertainty.

North America saw the slowest growth this quarter, averaging 0.6%. Most of the tracked markets had moderate cost increases driven by gross rent rises. The prime office segment remains insulated from the broader office market’s increase in availability, as corporates continue to prioritise best-in-class space to attract and retain talent. For example, in San Francisco, cost growth of 1.5% was largely fuelled by AI-sector occupiers with strong leasing appetites. Toronto declined by -2.0% given elevated vacancy and increased sublease availability. However, this means occupiers can upgrade to higher-quality space at more competitive terms, supporting longer-term market resilience.

regional rental growth trends

While most markets have seen rental growth since the pandemic, the pace and pattern of recovery vary. Regionally, Europe and North America have largely moved in tandem until now, whereas the story in the Asia Pacific is more polarised.

Gross prime office rents in EMEA and North America have followed a broadly similar trajectory over the past five years. After holding steady throughout the pandemic, rents increased between Q1 2022 and Q1 2024, rising by 9.4% in EMEA and 10.3% in North America. A rebound in occupier activity and improved leasing momentum supported increases. Growth slowed in 2024 amid economic uncertainty, ongoing right-sizing, and higher interest rates, before re-accelerating in early 2025.

Today, rents in EMEA are climbing more sharply than in North America. In EMEA, rents grew 7.2% YoY, driven by the tight supply of prime stock and fierce competition for high-spec, sustainable offices in core hubs such as London, Paris and Madrid. In the Middle East, prime rents have continued to strengthen across key hubs such as Dubai 27.6% YoY and Riyadh 14% YoY, supported by robust occupier demand from multinationals and regional corporates alike. The combination of limited Grade A supply, rapid economic diversification and pro-business reform has sustained upward rental pressure across much of the region over the past five years.

North American rents have increased 1.3% over the past year, with growth moderated by larger development pipelines and pockets of elevated vacancy, although high-demand markets such as San Francisco and New York continue to see strong rental gains. The combination of limited Grade A supply, rapid economic diversification, and pro-business reform has sustained upward rental pressure across much of the region over the past five years.

Across the APAC region, there are clear differences in gross rent trends across prime office markets. When viewed as a region, including mainland China and Hong Kong, prime office rents have declined by 5.9% since Q1 2020. However, when excluding these markets, the picture is very different; the remaining APAC cities achieved an 8.6% increase in rents over the same period. 

This bifurcation reflects chronic oversupply and ongoing macroeconomic uncertainty in mainland China and Hong Kong, contrasted with strong demand for best-in-class space elsewhere in the region. Mumbai and Kuala Lumpur are growth markets, where resilient occupier activity and limited availability of premium stock drive notable rental uplifts. Tokyo has had robust rental growth over the past five years, supported by tight prime supply and low vacancy rates. 

Together, these trends illustrate how multinational occupiers are diversifying their regional footprints to include more locations outside of China, increasingly favouring alternative Asian hubs.

Key markets comparison (London, Madrid, Paris, Dubai, New York, Los Angeles, Mumbai, Tokyo, Hong Kong)

We have also asked our local associates about the difference between these face rents and effective rents after negotiations. Prime office buildings tend to see effective rents very close to the original asking value, while buildings Grade A and below see larger negotiations. Generally, due to the higher demand and lower supply of prime markets, landlords are less flexible when it comes to negotiations in this class of building. Of our 40 markets, there is an average 5.6% lower effective rent in non-prime buildings.

METHODOLOGY

The Global Occupier Markets: Prime Office Costs 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).

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