- Tokyo continues to top the list with highest average cost of USD201 per square foot
- Heightened focus on innovative technology solutions to facilitate both in-person and remote collaboration
Source: Cushman & Wakefield
Asia Pacific is forecast to emerge from the downturn earlier than other regions across the globe and is well-positioned to return to strong economic growth by the end of 2020. While the region’s long-term fundamentals remain intact, the short but sharp recession will continue to echo and shape corporate decision-making into the future. Effectively, trends that may have taken many years to come to full fruition are being fast-tracked.
“As a result of the global pandemic, the increases in fit-out costs seen in recent years has reversed in most markets across the region. This trend is likely to persist as corporate occupiers continue to assess their capital expenditure budgets and corporate footprint requirements,” said Tom Gibson, Head of Project & Development Services, Asia Pacific. “We are also seeing greater integration of workplace strategy expertise into the early stages of the design and fit-out process. With working lifestyles and preferences evolving following the pandemic, companies are increasingly focused on aligning their space requirements with efficient workplace strategies and HR policies to better meet their corporate business and financial goals.”
Greater emphasis on health & safety and contingency planning, with new design trends focused on “touchless technology” and collaborative space
The focus on health and safety continues to intensify, bringing forward greater adoption of touchless technology, improved Heating, Ventilation, and Air Conditioning (HVAC) and smarter cleaning practices. Prolonged, enforced working from home has highlighted that productivity can be maintained, but at the cost of personal connection to colleagues and company culture. This raises questions around the optimal size and composition of the corporate footprint, while highlighting the need for ongoing investment into IT and audio-visual technology for collaborative team working. All these factors are important considerations as companies remain laser-focused on costs.
Mr. Gibson said, “The solution is to place a greater emphasis on strategic collaboration between corporate finance, human resources, corporate real estate, and workplace strategy. Companies are having to manage multiple levels of uncertainty and as a result, have a greater thirst for information. The role of the project manager remains pivotal to this solution by bringing meaningful data insights to clients, exposing them to best practices in the ‘new normal’ and assisting in making well-rounded decisions.”
Todd Hanrahan, Senior Director, Head of Project & Development Services, Japan, Cushman & Wakefield commented, “Office fit out costs in Japan are high in comparison to other countries. Factors driving the high cost include labor shortages and contractors being resident to the buildings which removes competitive tendering for a large amount of the capital works. Another influencing factor is the strict “no disruption” policy in Japan real estate meaning most if not all works is done at night and weekends.”
About Cushman & Wakefield’s Asia Pacific Office Fit-out Cost Guide:
Cushman & Wakefield’s Asia Pacific Office Fit-out Cost Guide is an essential tool to assist in corporate real estate decision-making regarding both fitting out and reinstating office space. The annual guide, which was first published in 2019, serves to assist occupiers in defining their capital planning and relocation budgets. It provides an overview of the office fit-out construction costs across 31 key gateway cities in the region, including a comprehensive fit-out cost section covering furniture, mechanical & electrical works, builder works, audio visual/IT and other miscellaneous costs.
Download the Asia Pacific Office Fit-out Cost Guide 2020-2021 here.
About Cushman & Wakefield
Cushman & Wakefield (NYSE: CWK) is a leading global real estate services firm that delivers exceptional value for real estate occupiers and owners. Cushman & Wakefield is among the largest real estate services firms with approximately 53,000 employees in 400 offices and 60 countries. In 2019, the firm had revenue of $8.8 billion across core services of property, facilities and project management, leasing, capital markets, valuation and other services. To learn more, visit www.cushmanwakefield.com or follow @CushWake on Twitter.