BNP Paribas Real Estate today announced that businesses delaying office occupation decisions risk significantly inflating their long-term costs with some occupiers facing additional lease expenses of up to 32% by 2028.
According to the firm’s new report released today, Time for change?: A guide for office occupiers making long-term decisions in uncertain conditions, as prime rents continue to climb and new supply dwindles across the UK’s employment hubs, companies that postpone until 2028 to sign a 10-year lease on 25,000 sq ft space could face cost increases of up to:
- £11.7 million in London’s West End
- £3.2 million in the City of London
- £2.2 million in both Leeds and Birmingham
“The landscape has shifted.” said Tom Bolland, Head of Occupier Solutions at BNP Paribas Real Estate. “The risks of inaction outweigh the risks of acting. We’re not just talking about higher rents but rather about a fundamental shift in occupier dynamics. There’s a shrinking pool of future-ready office space in core locations, and it’s being snapped up fast.
“Businesses putting off office decisions risk paying millions more in rent or finding themselves locked out of the market entirely. The message is clear: what might seem like prudent caution today could turn into a critical disadvantage tomorrow. By the time some businesses are ready to act, the space they need may not exist or it won’t be fit for purpose.”
Cost of waiting factors
Today’s market factors cited as impacting the cost of waiting include:
- Across the Big Ten regional cities, almost 40% of the committed development pipeline is already pre-let and is significantly higher in constrained cities such as Leeds, Cardiff, Newcastle and Edinburgh
- Pipelines in Bristol, Leeds, Edinburgh, and London’s West End are set to increase stock by just 5% or less
- Fit-out costs now range from £250 to £500+ per sq ft putting additional strain on budget planning
- New prime rent records have been set across all major UK cities, as well as numerous times across London’s West End and City markets
“The early movers are locking in value, future-proofing their real estate and gaining a competitive edge in recruitment and retention,” added Tom Bolland, Head of Occupier Solutions at BNP Paribas Real Estate.
“Meanwhile, cautious decision-makers are being left behind, not because they lack intent, but because the market is moving faster than their processes.
“We understand the hesitation. Hybrid working is still evolving, and the pressure to ‘get it right’ is enormous. But the data shows that waiting for clarity only breeds complexity.
“While some occupiers hesitate, others are moving decisively, often pre-letting new space well ahead of completion to secure future-proofed assets. The result is a widening gap between companies who act early and those who delay.”
Flex goes from backup plan to boardroom strategy
A standout trend in the report is the mainstreaming of flexible workspace, which is no longer a short-term fix, but a core part of corporate strategy.
“Flex has matured fast,” said Paul Anglo, Head of Flexible Offices. “It’s now a strategic tool, offering optionality, brand identity, and control. It’s being used by everyone from tech scale-ups to global banks managing lease expires. We’re seeing the shift from ‘nice-to-have’ to ‘must-have’.
“The rise of managed offices – all-inclusive spaces that combine flexibility with customisation – is particularly noteworthy.
“Flex today doesn’t mean compromise. It means curated experiences, high-end fitouts, and enterprise-grade infrastructure. For many occupiers, it’s the smartest route to high-impact space without long-term lock-in.”
Action today
“In today’s market, there’s no ‘perfect’ moment to act.
“But there is a clear cost to not acting. We’re not here to tell occupiers what to do but we’re giving them the frameworks to decide faster, smarter and with more confidence.
“Whether you stay, go, consolidate or flex – the one thing you can’t afford to do is nothing.” concluded Bolland.