Office Fit-out Cost

Office Fit-out Cost In Asia Pacific Up 4.5%

ASIA PACIFIC – The average office fit-out cost in the region increased by 4.5 percent year-on-year to US$108 per sq ft. This pertains to the progressive medium specification fit-out style, according to a new report published by Jones Lang LaSalle (JLL) on Friday afternoon (25 November, SGT).

As per the property consultancy’s Asia Pacific Fit-Out Cost Guide 2022/2023, most markets saw increases in office fit-out costs after construction pricing for this year were pushed up by the rising prices of fuel and raw materials.

Also, robust client sentiment has led to an increase in project volume over the past twelve months which, in conjunction with regional and global headwinds have resulted in significant inflationary pressure on construction and office fit-out costs.

“The biggest price increases were seen in Australia, Singapore, Malaysia and the South Asia markets, while Mainland China and South Korea reported modest year-on-year price increases, which has tempered the regional average.”

In particular, the average office fit-out cost in Singapore reached US$113 psf, while that in rival Hong Kong hit US$130 psf. Again, this pertains to the progressive medium specification fit-out style.

JLL noted that the availability of skilled and semi-skilled labour had a mixed impact across the region. Australia, which is already struggling with a tight labour market, is feeling the pressure as project volumes surge beyond pre-COVID levels. Meanwhile, Mainland China faces labour constraints due to its harsh travel restrictions that are part of its zero COVID-19 strategy. On the other hand, Singapore, which depends heavily on migrant labour, is gaining from the progressive easing of travel curbs.

In Hong Kong, office construction prices have remained broadly static, with only moderate price increases witnessed. However, Hong Kong, Mainland China, and Tokyo were the only markets where respondents cited government measures as cost drivers in 2022.

Still, the recent relaxation of restrictions in Hong Kong and Tokyo may help to alleviate some of the pressure on construction costs by next year. Conversely, Mainland China continues to be affected by stringent curbs and the possibility of sporadic lockdowns, which continue to create regional supply chain disruptions.

However, 97 percent of the Asia Pacific executives surveyed by JLL think that it will be more expensive to fit-out an office next year, whereas only 3 percent expect no change.

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