One of the most common questions we receive at FreeOfficeFinder is about the typical length of a lease/rental agreement when renting office space.
To help you understand what to expect, we’ve analysed data from over 1200 of our workspace rentals over the past 24 months to determine the average length of leases/agreements for:
Coworking
Serviced offices
Managed offices
Traditional/Leased offices
Coworking
Name of Agreement: Licence Agreement
Agreement Lengths Offered: Hourly, daily, weekly, monthly rolling
Average length: Monthly rolling
Best suited for: Small businesses looking for maximum flexibility in a shared workspace.
Benefits:
• Less commitment for startups or new markets: Shorter agreements allow businesses to test new markets and locations without a long commitment.
• Ability to upsize or downsize quickly: For businesses growing rapidly, coworking agreements allow for quick expansions, or on the other hand, space can also be scaled down.
• Lower financial risk: Monthly contracts allow organisations to lower their financial risk and adapt during economic uncertainty.
• Maximum flexibility for remote/hybrid teams: Short contracts allow employees access to physical workspace only when necessary, reducing the costs of unused office space.
Downsides:
• Lack of stability: Coworking contracts don’t guarantee access to the same desks/areas, and teams may often be split across the workspace.
• Limited customisations: Coworking providers rarely allow businesses to customise their space as they are on a short-term contract.
• Higher monthly costs: Coworking spaces can be seen as more expensive than a traditional lease. However, it is important to note that the scalability of coworking agreements can save money in the long term as businesses are only paying for the space they need.
• Fewer opportunities for negotiations: Coworking providers are less likely to offer discounts or perks such as free meeting room access for shorter contracts.
Serviced Offices
Name of Agreement: Licence Agreement
Typical Agreements Offered: 3 to 24 months
Average length: 12 months
Best suited for: Companies looking for private offices on flexible contracts at an all-inclusive price.
Advantages:
• Flexibility to leave: Organisations can easily expand or downsize their space if their needs change. This prevents them from being tied into lengthy contracts in an office space which is too big/small.
• Ideal for projects or transitioning businesses: A 6–12-month contract is perfect for a short-term project or a business transitioning during a refurbishment or recruitment period.
• Fast move-in: Serviced office contracts allow teams to move in quickly and start working immediately.
• Ability to trial a location: Like a coworking contract, serviced office agreements allow businesses to test new locations. We have found that many of our clients looking for their first office space in London are searching for short-term contracts to test out a new location.
Disadvantages:
• Potential of frequent relocations: If a contract renewal isn’t agreed, businesses may need to relocate at the end of the term.
• Limited brand presence: A shorter contract may limit an organisation’s ability to build a local connection.
• Less ability for in-depth customisations: Serviced offices can be customised to suit individual businesses, however, as the contracts are shorter, there may be limitations. For example, it may not be possible to implement dedicated facilities such as breakout spaces or meeting rooms.
Managed Offices
Name of Agreement: Licence Agreement or Lease
Typical Agreements Offered: 12 to 36 months
Average length: 24 months
Best suited for: Businesses requiring a branded, fully customised workspace on a shorter term than a traditional lease.
Pros:
• Balance between stability and flexibility: A 1–3-year contract offers a longer term than a serviced office but less of a commitment than a traditional lease.
• More customisation options: Managed landlords are more willing to fully customise the space to include fit-out, branding and dedicated facilities.
• Predictable budgeting: A longer lease allows businesses to budget more accurately, whilst allowing room to re-evaluate if necessary.
• Lower upfront costs than a traditional lease: Managed spaces include the cost of furniture and utilities, which lowers the upfront costs.
Cons:
• Less flexibility than coworking or serviced offices: A 1-3-year contract may feel more restrictive if your business expands faster than expected.
• Requires long-term planning: Businesses must ensure they have the right cash-flow, team size and location to commit for a possible 3 years. This may be challenging in fast-moving sectors.
• Can be a financial risk for startups: Startups may struggle to commit financially to a 12-month lease.
Traditional/Leased Offices
Name of Agreement: Lease
Typical Agreements Offered: 3 to 15+ Years
Average length: 5 years
Best suited for: Businesses wanting full control of their office space and a long-term base.
Benefits:
• Long-term cost efficiency: A longer lease can be significantly cheaper than a flexible workspace, but it is important to consider that a traditional lease often doesn’t include utilities and maintenance.
• Complete control of the workspace: Traditional leased landlords allow businesses to fully customise their space.
• Easier to build a brand identity: A long-term presence in a prestigious area (like London’s Mayfair) helps to build trust and connections, especially for businesses in the finance or legal sectors.
Disadvantages:
• Limited flexibility: If your business unexpectedly grows or downsizes, you’re tied into a lease for a space that may be too big or crowded.
• High exit costs: Longer leases usually involve significant legal and financial costs if trying to exit early.
• Unsuitable for startups or agile teams: Organisations renting leased spaces must have a clear 5–10-year plan. Otherwise, they risk overcommitting to a space.
How the Length of an Office Lease Can Impact You
Shorter leases, such as those for coworking and serviced offices, tend to cost more per desk. This is due to the higher level of flexibility, minimal commitment, and quick set-up.
It is important to remember that flexible workspace pricing includes rent, business rates, utilities and service charges. For smaller businesses or those rapidly expanding or downsizing, this cost is often worth the reduced long-term financial risk.
On the other hand, traditional leases are often the cheapest per square foot. However, they have higher upfront costs and a greater long-term risk. These contracts also don’t include cleaning, furniture, or IT infrastructure, which can raise the overall costs.
Managed offices are a great middle ground. They are generally more cost-effective than serviced offices while offering more flexibility than a traditional lease. The longer term allows landlords to bundle services such as internet, furniture and cleaning to reduce hidden costs.
How to Choose the Right Length of Office Lease
Assess Your Potential Business Growth
Estimate the number of employees and size of office you will need over the next 6, 12 and 24 months. We recommend leaning towards a shorter lease if you cannot get a specific idea of the space you’ll need.
Review Your Finances
Review and decide how much money you are willing to spend on office space. Shorter leases may have a higher monthly cost but require less money upfront.
Consider The Norm in Your Industry
Each business will have specific requirements. However, we have found that some industries, such as law and finance, prefer long leases to boost credibility and stability. Tech and media companies often opt for shorter contracts for project spaces and hybrid working.
Account for Hybrid/Remote Working
If your business operates remotely or offers hybrid working, you should always consider how much office space you really need. Employees may not require their own desk if they’re not in the office full-time. A short-term coworking space or a serviced option can reduce unused space.
Consider Your Branding and Layout Requirements
Do you need a fully branded workspace or a custom layout? Choosing a managed office or a traditional lease will give you more customisation options than a coworking space.
Assess the Importance of a Stable Location
If you regularly have clients visit your office, signing a longer lease in a prestigious area could be more beneficial to build your brand.
Don’t Forget About Maintenance
Short-term contracts for coworking and serviced offices include all building maintenance. If your business does not have the resources or staff to manage the maintenance of your space, then a shorter, all-inclusive contract will be the best fit.
Ensure Break-Clauses and Flexibility
If you’re unsure about your long-term needs but still want to commit to a multi-year deal, aim to negotiate a break clause or lease review after 12 months.
Trial a Short Lease
As mentioned, short leases are fantastic if you’re unsure about the location or type of workspace you’d like to rent. We have found that some of our clients who initially rented a coworking space through us have upgraded to renting a private serviced office in the same building.
Lengths of Office Leases in 2025: What We're Seeing
Shorter Lease Terms Are Gaining Popularity
In our recent analysis of office lettings, we have found an increase in companies opting for 6-24-month contracts which are usually a mix of serviced and managed options. This shift seems driven by economic uncertainty and a rise in remote and hybrid working.
Hybrid Working Is a Deciding Factor
We have seen increased enquiries from companies looking to reduce their office footprint due to hybrid/remote working. They mainly search for smaller, flexible spaces to accommodate only the staff members they have each day, rather than their entire workforce.
Break Clauses and Scalability Are Standard Requirements
In our experience, more of our clients are requesting break clauses, early-exit options and the option to up/downsize during the term. Flexibility is key in closing deals, even in traditional and managed agreements.
Landlords Are Becoming More Flexible
We have seen a significant increase in managed workspaces as landlords that previously offered traditional leases are becoming more flexible.
Whether you’re a startup, an established organisation or somewhere in between, the length of your office space lease can significantly impact your finances, flexibility and long-term goals.
After analysing thousands of office lettings, we can confidently say that there is no “one size fits all”. Shorter leases give you speed and flexibility, whilst long-term contracts provide stability. Ultimately, the best option is the one that works for your company and your goals.
