The death of the 10-15 year lease – how occupier behaviour is shaping landlord strategy

The traditional 10 to 15 year office lease is becoming commercially obsolete. Not because occupiers don’t need office space, but because rigid, long-term commitments no longer align with how modern businesses operate.

Most businesses now plan in quarters, not decades, with fluctuating hiring cycles and hybrid policies. Locking into a fixed footprint for 10 or 15 years is a financial risk fewer businesses are willing to take.

Since 2019, UK office lease lengths have shortened. Pre-pandemic norms were around four years, but by 2023, most new leases were close to three years, a trend that’s continued.

Regional hubs like Leeds, Manchester, Birmingham and Bristol now favour five to six year terms, while London leases now run for three to five years. Serviced offices in London have also extended from short three to six month agreements to 12 to 24 months. Glasgow mirrors the wider UK pattern, with average leases falling from seven to 10 years pre-2019 to three to six years now.

This isn’t a post-pandemic blip, but a structural shift in occupiers’ approach to real estate, forcing landlords to rethink lease structures, building design and portfolio strategy.

What occupiers want 

Businesses consistently prioritise optionality, flexibility and the ability to adjust space according to actual usage. SMEs and start-ups typically opt for one to three years rolling/flexible leases, while creative, media and tech companies favour two to five year agreements, often using serviced or managed space. Professional services and established corporations generally take three to seven year leases. Ten to 15 year commitments are now far less common.

Occupiers want to scale up or down without renegotiating, test new locations without betting the next decade on a single decision, and navigate hybrid working, which makes long-term planning nearly impossible.

Flex and managed space isn’t temporary 

Flexible office space was once a stopgap – now it’s a deliberate strategy. Our data shows this. In Bristol, demand for managed and serviced office space has risen 42% since 2019, while traditional lease enquiries have declined. Similar trends appear in South East England (+37%) and the North West (+38%). Occupiers are actively reallocating how they take space, rather than simply delaying decisions.

Flex and managed office solutions complement a HQ in the medium-term, with fitted floors on shorter terms with predictable costs and no long-term risk – a premium many businesses are willing to pay. Both models offer predictability and control without long-term commitment – businesses know what they’re paying each month, there’s no dilapidation risk, and if needs change, they’re not trapped.

How landlords are adapting 

Smart landlords are redesigning portfolios to offer a mix of traditional leases, managed space and flex capacity that can be repurposed quickly. Some partner with experienced flex operators, others build in-house capability. The focus is on choice, reducing vacancy risk and creating multiple revenue streams.

Buildings are being designed for flexibility, with modular layouts, demountable partitions and flexible infrastructure. Landlords now optimise returns per square foot across shorter cycles, rather than chasing headline rents on long leases. Flex space can generate better returns than traditional leasing, especially when the alternative is extended vacancy periods.

Long leases haven’t disappeared, but they’re evolving 

Large, stable businesses still take long leases, but they demand more flexibility. The new model includes a wider range of lease structures, including five-year terms with rolling breaks and managed space with expansion options. Thriving buildings offer multiple options under one roof, requiring active asset management rather than relying on decade-long contracts.

What happens next?

Traditional lease structures will remain under pressure, particularly in secondary stock, while landlords compete with flex and managed office providers. Prime buildings will continue to outperform, but only if they combine quality with flexibility.

The death of the 10-15 year lease doesn’t mean the death of the office, but it is the end of inflexibility. The landlords who act on that now are the ones who’ll remain competitive in the market.

Nick Riesel is managing director of FreeOfficeFinder