Latest Global Highlights
Updated July 2025
New Zealand
Office lease terms have continued to shorten, now averaging 31 months. Retail saw a modest recovery in 2024 before shifting back toward shorter agreements in 2025. Industrial leases are also trending shorter, with more tenants opting for flexible timeframes to suit evolving operational needs.
Australia
Office lease lengths are gradually contracting, reflecting hybrid work preferences. Retail leasing is adjusting to tenant demand with more varied term lengths. Industrial leases have reduced in duration over the past year, as occupiers seek more agility despite stable demand.
United Kingdom
Office and retail leases have continued to compress over the past three years, with shorter agreements becoming more common. Industrial lease terms have increased slightly — the only sector seeing a move toward longer commitments in 2025.
Why Lease Length Matters
Lease length is a critical factor in managing risk and tenant retention. It's importantly linked to a number of areas in real estate businesses such as:
Portfolio Performance: Influences key KPIs such as WALT, WALE, vacancy rates, and utilisation.
Tenant Health: Shorter leases can signal increased tenant risk, while longer leases often reflect tenant stability and confidence.
Strategic Flexibility: Highlights landlord responsiveness to demand for shorter terms and hybrid leasing options.
Valuation and Income Stability: Directly affects asset yields and the predictability of future cash flows.
