The cost of prime office space grew 3.4% globally year on year in H1 2025, with London’s West End remaining the world's most expensive submarket, according to Savills’ Q2 2025 Prime Office Costs report.

The City saw average office costs rise 0.4% in Q2, while Dublin saw an increase of 0.6%

Net effective costs rose in the majority of markets in Q2, driven by 0.9% growth in gross rents globally and a 0.8% uptick in fit-out costs.

These increases followed a 0.3% rise in grade-A rents in the final quarter of 2024, when fit-out costs rose by 0.2%.

Savills also found that businesses were taking more space on average in H1, with 59% of transactions involving an expansion compared with 54% in the second half of 2024. Only 8% of deals tracked in the first half involved firms downsizing their space.

While the West End was the most expensive submarket globally, with an annual cost of $312.13/sq ft, costs remained steady in Q2.

Hong Kong recorded the second highest rents, at $225.28/sq ft, while New York’s Midtown recorded a 1.6% rise to $203.57/sq ft.

The City of London recorded a 0.4% rise on costs, reaching $193.03/sq ft annually, while Dublin office costs rose 0.6% to $99.90/sq ft.

Rick Schuham, chief executive of global occupier services at Savills, said: “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, added: “As the flight to prime continues, digital property management platforms, smart access and HVAC [heating, ventilation, and air conditioning] systems and occupancy sensors and space utilisation tracking are now standard across many global markets.

“Demand for technology that 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.”