Do fit-out costs matter?

June 14, 2018 / By  

In an operating environment where companies of all sizes are increasingly focusing on the ability of the workplace to enhance employee engagement, improve experience, and increase productivity at work, office fit-out is acknowledged to play an important role. But how much does it cost in Asia Pacific?

For the second year in a row, JLL has benchmarked fit-out costs across major cities and geographic hubs around the region. This year, 19 cities were covered, an increase from 16 in 2017. Total fit-out costs rose in USD terms over 2017 for 13 of the 16 markets we covered in both years with an approximate increase of 6% from 2017’s average cost of US$80 to US$85 in 2018. There is wide variation in costs across the region, from US$165 psf in Tokyo to US$50 psf in Bangalore. Tokyo, Seoul, and Sydney are the most expensive markets for fit-out in the region, while Manila, Jakarta, and Bangalore are the lowest cost locations.  This year for the first time, we have partnered with a supplier to provide benchmarks of furniture costs across the region.

We observed noticeable changes in cost in some key mature cities, namely Beijing, Melbourne, Sydney and Tokyo, between 2017 and 2018. Regulatory changes, as well as supplier shortages driven by buoyant construction and office markets were among the key drivers. We also found that exchange rate volatility had a notable impact on fit-out costs (in USD terms) over the past year in some locations. In cities such as Singapore and Bangkok, domestic fit-out costs for local corporates were decreasing. However, for MNCs fitting out offices in these markets, costs in USD increased due to the local currency strengthening against the US dollar

The typical cost break-down for an Asia Pacific office-fit out would include preliminaries, builders’ work (non-structural works such as internal walls, flooring, built in joinery and signage), mechanical and electrical (M&E) works, audio/video and data installation, design and professional fees. In our latest findings, builders’ work and M&E works are the top two most expensive categories across the 19 cities we covered (see chart).

Figure 1: A cross-city comparison average cost breakdown in Asia Pacific
Source: JLL

For more insights on costs across Asia Pacific please stay tuned for our upcoming 2018 “Asia Pacific Fit-Out Cost Guide”, and get a global view with JLL’s fit-out cost benchmarks for the United States and Canada and EMEA.

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