Expansion Leases Dominate Global Prime Office Deals in H1 2026

Corporate Growth Returns to Prime Office Leasing

Companies pursuing expansion deals now account for most prime office leasing activity worldwide, according to Savills’ latest Market Makers report. Irei writes that the global brokerage tracked the top 10 office leases across 47 major cities. It found that 58% of prime office deals in H1 2026 involved companies adding space. This marks a significant shift from the defensive leasing strategies that dominated recent years.

Only 5% of deals involved occupiers reducing space. Meanwhile, relocations and renewals with similar footprints represented 37% of activity, down from 44% in H2 2025. The figures show stronger growth appetite among office users targeting best-in-class properties. Decision-makers increasingly prioritize quality and expansion as hybrid work models mature. This trend stands out despite steady, rather than exceptional, overall prime leasing volumes.

The Details

Flexible office operators are pursuing growth especially aggressively. Savills found that expansions represented 78% of their prime deals during H1 2026. More than half, or 56%, added space in markets where operators already maintained a presence. That pattern points toward deeper market consolidation rather than widespread geographic expansion.

Prime office costs are also climbing. Global net all-in occupier costs rose 1% during Q2 2026, bringing the rolling 12-month increase to 5.3%. North America recorded the strongest quarterly increase at 2.1%. San Francisco led with 7.7% growth, followed by downtown Manhattan at 5.6%. Washington, D.C. rose 4.0%, while Seoul increased 3.8%. EMEA and Asia Pacific each recorded increases of only 0.5%. Meanwhile, rising supply and cooling demand slowed prime cost growth across several mainland Chinese cities.

Flexible Providers Double Down as Tech Demand Accelerates

The flex sector’s appetite for premium offices highlights targeted expansion rather than speculative entry into new markets. Many major H1 deals involved flex operators expanding existing footprints, according to Savills. Tech and AI firms also secured long-term headquarters space. These occupiers increasingly drive prime demand in San Francisco, London, and Shenzhen.

Technology and AI companies are quickly absorbing top-quality inventory to support flagship workplaces. Their expansion is increasing tenant competition, particularly where overall office inventory remains stable or constrained. Outside North America, however, occupiers face less intense cost pressures. Increased inventory in major Chinese markets creates selective opportunities for tenants seeking high-quality space. New buildings and refurbishments are expanding those options. Companies should therefore track local supply and pricing trends instead of relying only on global averages.

Why It Matters

Expansion-led leasing at the market’s upper end signals renewed confidence among major office occupiers. Companies increasingly use premium workplaces to strengthen corporate identity, recruitment, and talent retention. This shift follows a period when US occupiers prioritized flexibility and portfolio stability over expanding their office footprints. Savills CEO Rick Schuham says organizations increasingly prioritize premium offices in the most desirable locations. That concentration continues pushing costs higher across leading markets. San Francisco and Manhattan illustrate this pressure, with occupancy costs rising 7.7% and 5.6%, respectively.

AI and technology tenants are also becoming major competitors for prime space from London to Shenzhen. Their growth could reshape local rents, competition, and supply dynamics. Expansion by flex and technology companies reverses the contraction and space optimization cycle that defined earlier pandemic-era leasing. Prime assets could outperform as companies pursue flexible and flagship workplaces. Meanwhile, lower-quality or poorly located properties could fall further behind. Regional cost disparities reinforce the importance of localized strategies, particularly amid oversupply in some Chinese markets.

What’s Next

Expansion leasing could remain elevated as AI and technology companies increase global headquarters investment. Savills sees further growth potential across multiple regions if current demand trends continue. Occupier costs could keep climbing in major US and selected Asia-Pacific hubs. Prime space remains scarce in these markets, while tenant competition continues intensifying.

However, new deliveries and refurbishments could ease cost pressure in markets with excess supply, particularly across mainland China. Premium office demand is increasingly concentrated among technology and flex occupiers. That concentration could deepen the divide between stronger and weaker office markets. Brokers, landlords, and occupiers will need deeper analysis of local supply, demand, and costs throughout the remainder of 2026.