Two-thirds of new retail leases completed in Q3 2026 were for less than three years, according to the latest Re-Leased Market Lens research.
Average retail lease length fell 11.4% year-on-year to 36.1 months. That is the lowest Q3 figure since the series began, and roughly half the Q3 2019 level of 73.3 months. The rise in short leases came from terms of one to three years, not from leases under 12 months.
Office leases moved in the opposite direction, with average lease length up 6.1% year-on-year. At 43.4 months, the average office lease length remains well below pre-pandemic levels, and 46.9% of office leases starting in the quarter were still under three years.
Industrial kept the longest lease profile of the three sectors with average lease lengths of 53.2 months, broadly unchanged on last year.
Rent collection remained high across all three sectors, at 97.8% for office, 97.6% for retail and 96.2% for industrial. Industrial recorded the highest tenant retention (81%) and rent retention (88.9%) in the 12 months to September, despite having the lowest collection rate. The office sector followed at 78.1% and 85.2%, with retail lowest at 74.7% and 79.3%.
Tom Wallace, CEO of Re-Leased, said: “Office had a better quarter, but almost half of new office leases still run for under three years, and in retail it’s now two-thirds. Tenants appear less willing to commit for the long term, though how far that goes depends on the sector. Shorter lease terms change the rhythm of portfolio management.
“They bring the next negotiation, the next renewal and the next income decision closer, putting more weight on how landlords and property managers plan for those moments. Collection can look healthy today while the longer-term income picture is less certain, so it helps to look at lease length, tenant retention and rent retention together. One shows how long income is committed for; the others show how much of it is being kept.”
