September 30, 2025
Service charges rise as firms invest to encourage people to spend more time in the office
Office occupiers faced a 9 percent increase in service charges last year as landlords and managing agents invested more heavily in maintenance and amenities to encourage people back into physical workplaces. The findings come from BDO’s latest PropCost benchmarking report, which tracks more than £600 million of expenditure across over 1,000 commercial properties. The data shows the average cost increase for offices followed a 15 percent rise the previous year, underlining the pressure on both landlords and tenants from higher running costs.
The main drivers include wage inflation, which has pushed up the cost of cleaning, security and other soft services. Landlords have also been carrying out deferred maintenance and funding upgrades to facilities, from air handling systems to shared amenities, in an effort to meet post-pandemic expectations for quality workplaces.
Location continues to play a major role. Central London offices now have service charges nearly 70 percent higher than the UK average for comparable properties, reflecting higher staffing costs and the demand for premium services.
Other sectors have also seen significant rises. Service charges in shopping centres increased by 11 percent and retail parks by 14 percent, as operators sought to broaden the offer and respond to changing customer behaviour. Industrial parks experienced a smaller uplift but remain subject to increased security and maintenance costs.
The report, produced with input from RICS and real estate firms including CBRE, JLL and British Land, highlights the challenge for occupiers in budgeting for ongoing property expenses. Andrea Hunt, partner at BDO, said the findings should help decision makers to review past spending and improve forecasting.
The report concludes that, for businesses focused on encouraging staff into the office, higher service charges add to wider cost considerations. It claims that landlords will need to demonstrate how investment in building services and amenities delivers tangible benefits for productivity, collaboration and wellbeing, if occupiers are to accept continued increases.
