According to Savills Q2 2025 Prime Office Costs report, of the 40 markets the international real estate advisor monitors, 24 saw net effective occupier costs grow this quarter, driven by rising gross rents and fit-out costs in top-tier buildings.

North America saw the highest increase in overall occupier costs in Q2, with an average growth of 1.4%.No markets in the region experienced cost declines this quarter, and only San Francisco, Los Angeles and Chicago remained flat. The region continues to see broad appeal and strong  demand for prime offices. Miami has witnessed a significant cost growth of 3.4% over the past quarter and has the highest occupancy levels among major markets in the US.

In Asia Pacific, net effective costs remained flat overall with no change this quarter. A story of intra-region divergence continues to play out across Asia, as key markets in Mainland China see cost declines. In Q2, average costs in the Chinese markets fell by -2.5% as business confidence remains low and supply of prime office remains high. This decline contrasts sharply with other markets across the region, such as Kuala Lumpur, which saw 4.4% cost growth, fuelled by a flight to quality among tech firms and multinationals.

Europe and the Middle East saw a 0.8% net effective occupier cost growth this quarter. A handful of markets outpaced the average, with Paris, Milan, and Prague each recording increases above 2%. The latter led the region with 3.1% cost rises, driven largely by very limited new supply in the market.

According to Savills complementary Market Makers report, which examines the top 10 prime office occupier deals by size in the same 40 cities, the international real estate advisor found that businesses are taking more space. 59% of transactions involved an expansion compared to 54% in the second half of 2024. Only 8% of deals tracked this half year saw organisations downsizing their space.

Rick Schuham, CEO of Global Occupier Services at Savills, comments: “Net effective costs for prime office markets across the globe continue to grow while the number of businesses taking more space is also on the rise. Occupiers are targeting best-in-class buildings, as they prioritise premium office space to attract and retain talent, meet ESG commitments, and shape corporate brand.”

Sarah Brooks, Associate Director in Savills World Research team, adds: “As the flight to prime continues, digital property management platforms, smart access and HVAC systems, and occupancy sensors and space utilisation tracking are now standard across many global markets.  Demand for technology which enhances the environmental ratings of buildings is also high, especially among tenants in Europe, as real estate is a critical lever for corporate emissions reduction.”  

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Notes to Editor

*Prime is used to describe the very top tier of Grade A office space in a market, typically the office space demanding the highest 5-10% of rents in that market: the term is more commonly used in EMEA and APAC with the term ‘trophy’ preferred to describe the same space in North American markets. Grade A offices are the most modern offices, typically brand new space or very recently refurbished offices that offer the highest amenities and facilities, strong sustainability credentials, advanced infrastructure and are in a central location.

Savills 'Global Occupier Markets: Prime Office Costs’ 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 prime average.

All costs are reported in a standardised format of USD per sq ft of usable space per annum at a fixed exchange rate 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).