Overall leasing activity contracted by a modest -0.7% compared to H2 2024. Occupier demand continues to focus on best-in-class buildings, as occupiers prioritise premium office space to attract and retain talent, meet ESG commitments and shape corporate brand.

Despite this slight decline in total leasing volumes, a higher proportion of deals involved businesses taking more space, with 59% of transactions involving an expansion compared to 54% in the second half of 2024. Only 8% of our tracked deals this half year saw organisations downsizing their space. Prime office occupier costs increased by 1.7% during the same period, with this most recent quarter seeing 0.7% overall cost growth globally.

European and Middle Eastern markets had 34% of the overall volume by area, with 12.5 million sq ft leased. The 13% increase in leasing volumes over the last period results from major deals, including the 700,000 sq ft relocation of Commerzbank in Frankfurt. Tech and finance remain the dominant sectors behind growth in leasing volumes in this region, with 1.5 and 2.2 million sq ft transacted over the last period, respectively.

Asian and Australian markets delivered 11.2 million sq ft of transactions over this half year, a significant drop from 15.4 million in H2 2024. This activity brings it from the largest transacting market in H2 2024 to the smallest during H1 2025. Several industries saw reduced transaction volumes, specifically flexible office and tech tenants saw a -67% and -53% decline in space leased, respectively. However, government and education grew significantly, with transaction volumes up 133% over the last half of 2024. One such example is the Japan Fair Trade Commission’s expansionary 250,000 sq ft relocation in Tokyo.

Over half (59%) of the deals in our dataset were either new leases or expansions, up from 54% last half year. Major occupiers across industries continue to place a high value on office space, as 33% of deals maintained current sizing, and only 8% downsized.

In the first half of the year, the finance sector recorded both the highest number of deals overall and the highest number involving expansion of space. A wide variety of tech and media companies are taking space in large quantities, with traditional businesses such as Google taking over 400,000 sq ft in San Francisco, to newer organisations like Chinese e-commerce giant Meituan taking 230,000 sq ft in Beijing. Growing momentum around AI and high competition for top-tier AI engineering talent is driving leasing demand.

Government and education occupiers overtook the legal and professional services sectors in the markets we track, with the number of deals increasing 22% half-on-half, and average deal sizes increasing by 69% over the same period. Leasing deals in the government and education sector averaged 172,473 sq ft in H1 2025, with notable deals, including New York University’s 70-year lease of over one million sq ft adjacent to the university’s main campus. Interestingly, the new site will enable the university to consolidate into a single hub over time, meaning some office space will return to the market after a significant period of occupancy. Tech and finance sectors posted average deal sizes of 107,578 and 115,067 sq ft, respectively.

Flexible offices saw a similar number of deals as the previous period; however, a greater share were expansionary. While this sector has historically been most active in Asia, especially in India, in H1 2025 EMEA recorded the most transactions. At 64,988 sq ft per deal on average globally, these are amongst the smallest deals, but the sector is expanding across all regions, signalling continued interest in the industry.

Financial occupiers remain the most reliable drivers of leasing activity worldwide, consistently leading deal volume across regions, even as overall transaction counts fluctuate. Much like in H2 2024, these firms continue to dominate office take‑up, moving forward with leasing deals despite ongoing geopolitical and macroeconomic instability.

For the flexible office sector, Asia Pacific had the largest volume of deals by area, despite a lower total number of deals. This reflects the fact that many start-ups in developing economies may struggle to raise enough capital to permanently occupy space, and these temporary solutions can bridge that gap. Meanwhile, in Western markets, where many occupiers are focused on encouraging employees to return to the office, offering coworking options can help connect teams spread across different locations.

Government deals were concentrated in North America and EMEA, with many large public institutions and educators seeking to renew their leases or relocate to similar sized spaces. These deals include a 700,000 sq ft lease in Riyadh for a key government industry.

Tech and media saw the largest volume of transactions in North America over the past six months. Leases in the major tech markets, such as San Francisco, were 81% larger on average compared to APAC and EMEA, likely a result of the sheer concentration of top-tier talent in this significant American market. Another key trend is that some tech firms overcorrected their office footprints in response to remote working trends and are now expanding again as they introduce policies to encourage greater office attendance.

Finance has expanded its dominance in the total size of transactions this half-year, as tech has seen a slight decline this quarter in terms of square footage.

Government and education sectors saw the largest increase in leasing volume over the past six months. These occupiers typically sign longer-term leases and rarely seek to expand or reduce space, instead generally opting to maintain their current footprint. This recent uptick in activity could be a coincidence, reflecting several large occupiers renewing simultaneously, but it may also reflect a growing focus on optimising the global real estate portfolios of these organisations.

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