Healthcare leasing trends shaping 2026

Incentives are back — but unevenly

Landlords in suburban strip and secondary office stock are competing hard for healthcare tenants because medical practices are sticky, invest heavily in fit-out and rarely default. That competition is showing up as rent-free periods and fit-out contributions rather than face-rent reductions.

Prime medical precincts and hospital-adjacent buildings remain tight, so the negotiation there is about term flexibility, expansion rights and capped outgoings rather than headline rent.

• Incentive levels differ sharply between submarkets — always benchmark locally
• Face rent is often held while effective rent moves; measure the effective number
• Fit-out contributions are increasingly negotiable for long-term medical tenants

Occupancy cost, not rent, is the real metric

Outgoings, parking licences, after-hours air-conditioning charges and make-good provisions can add 20 to 30 per cent on top of base rent. A tenancy with a lower rent and uncapped outgoings frequently costs more over five years than the alternative.

Model total occupancy cost per consulting room per year across every option. That single number makes competing tenancies genuinely comparable.

What this means for your renewal

Preparation decides the outcome. Practices that begin their renewal 12 to 18 months before expiry retain the credible option of moving — and that option is the entire source of negotiating leverage.

• Diarise option and expiry dates now, not next year
• Test the market even if you intend to stay
• Get make-good liability quantified before you negotiate anything else