Comparing office fit-out costs
In this section, we explore the average cost of office fit-out across high, medium, and low specification in 50 markets, comparing these costs on a super-region basis.
The EMEA office fit-out cost landscape
London holding firm
London’s place as a global financial hub has held firm, with office fit-out costs now the most expensive internationally at a high-spec average of US$5,932 per m2 – coming in higher than New York for the first time. London remains the investment focus for the majority of global occupiers within the UK. As well as rising fit-out costs and skilled labour pressures, high demand is causing an overall shortage of Grade A commercial office space in London. In the City of London, availability for newly constructed, sustainable office buildings has fallen drastically, amid intense competition. The City is outperforming other boroughs from a leasing perspective, with circa eight percent rental growth anticipated in 2025. Lack of capacity has put the brakes on what some feared was the beginning of an exodus of global firms from Canary Wharf. With notable exceptions, such as HSBC, who are moving to a new site in St Paul’s, many companies have chosen to stay put, instead taking the opportunity to refurbish their workplaces to meet changing workforce and ESG needs. Citigroup is reported to be investing over £1bn in a major refurbishment of its 42-floor owned and occupied Citi Tower in Canary Wharf, with sustainability a major factor in the decision to renovate rather than rebuild. Fintech start-up, Revolut, has also announced its commitment to a new global HQ in Canary Wharf, reflecting a drive to attract more start-ups and fast growth businesses to the district. Confidence in the office market in London is underlined by ongoing development of high-rise space with recent developments such as 8 Bishopsgate being snapped up by occupiers on the basis of their strong sustainability credentials. In one of the largest openings of 2025, British Land is set to unveil 1 Broadgate, which is already fully let, again highlighting occupier appetite for premium space.
A cautious outlook across Europe
Most European office markets have benefitted from a gradually improving economic backdrop, with a relatively stable picture overall in hub markets. The trend towards portfolio downsizing to drive efficiency improvements is still playing out in some locations, with a cautious overall approach by most occupiers.
Across Europe, clients are looking for higher quality, more sustainable, state-of-the-art spaces in central, convenient locations. Traditional markets continue to be the most expensive in the region, with high-specification office fit-outs in Paris, Munich and Amsterdam costing upwards of US$4,000 per m2, with Zurich topping the chart at over US$5,000. Despite geopolitical instability, supply chains for materials and specialist equipment have proved resilient. The sector has adapted to a ‘new normal’ of disruption over the past five years and real estate teams are better set up to absorb sudden shocks, with the latest turbulence stemming from the volatility around US tariffs on European goods. Across the EU, different markets are seeing varying patterns of demand. In Germany, the recessionary backdrop is affecting occupier confidence. Munich has experienced a demand wobble with vacancy rates the highest they have been since 2011. However, this has not caused a relative decrease in office fit-out costs, with Munich high-spec office fit-outs costing US$4,137 per m2. The rightsizing of office space for the economic environment is set to continue to play out in the medium term, but new sources of demand are emerging from AI-focused tech companies, with Germany home to the highest number of top performing start-ups in the EU.
Dublin has experienced some cooling in demand, however, there are emerging signs of resurgence. In Q4 2024, annual take-up rose 66 percent, signifying renewed occupier confidence with notable large transactions, such as Deloitte’s new Irish HQ lease. At US$3,460, a high-spec fit-out in Dublin costs comparatively less than many other European capitals and the city continues to attract global businesses who see it as a gateway to the EU.
Across Europe, the largest increases in overall demand are being seen in the financial and professional services sectors, but the exponential growth of data centres and continued strength in the life sciences sector are also providing alternate sources of demand. We are currently working with a leading global life sciences company, who are consolidating their office footprint across key central sites in Paris. This reflects a wider life sciences sector trend towards the colocation of office and lab space close to talent hubs
New hubs in the Middle East
Competing demand from the tourism, hospitality and luxury residential sectors is nudging up office fit-out costs in the Middle East. However, costs remain attractively lower in relative terms, when compared to European capitals. The average premium office fit-out in Dubai and Abu Dhabi comes in at US$3,499 per m2. With the Kingdom of Saudi Arabia looking to cement its position as a global hub, we are seeing international businesses, which would traditionally have just one Middle Eastern regional office, expand their portfolios into the country. Riyadh, which until recently was not on the map for many occupiers, is seeing a rising wave of demand, particularly from international firms involved in the delivery of the nation’s giga programmes such as NEOM and Diriyah Gate. More than 600 companies have established regional headquarters in Saudi Arabia since the government’s Saudi regional HQ programme was launched four years ago.
Keeping pace with this rising international appetite is proving a challenge. Both Dubai and Riyadh are struggling with a shortage of readily available high specification office space. In Riyadh, a significant wave of new Grade A office space is due to be delivered by the end of 2025 to help satiate demand. Due to fierce competition for labour and materials from the giga programmes, a high-spec office fit-out costs an average of US$500 per m2 more in Riyadh when compared to Dubai, at US$3,864 per m2.
Young talent and lower costs drive interest in Africa
A strong pool of young talent and comparatively low operating and build costs continues to fuel growth in the occupier sector in key hubs across Africa, despite economic headwinds. Office fit-out costs in Africa remain low by a global standard; the average cost of a premium office fit-out in Nairobi (US$1,329 per m2) is around 25 percent of that found for the same quality space in Western markets. Growth in specific sectors, particularly tech, energy and banking, is helping to keep demand for premium space steady. Google, for example, has recently celebrated the opening of a LEED Platinum certified office in Nairobi, housing product development experts. General construction labour remains largely oversupplied across key markets, helping to keep costs low. Even in South Africa, the most expensive African office fit-out region, the average price of a high-specification office fit-out stands at US$1,864 per m2. However, with the expansion of the industrial and data centre markets, there is increasing demand being placed upon a smaller pool of specialist technical experts, especially in West Africa, which may push costs up over time.
The Americas’ office fit-out cost landscape
An improving but fragile picture in the US
Office fit-out costs in New York and San Francisco continue to outpace the rest of North America at well above US$5,000 per m2 for a high-spec office fit-out, as the drive for quality over quantity continues to play out. The shift back to the office for many workers, particularly in sectors like professional and financial services, is being accompanied by a continued focus on making workspaces attractive for employees with better amenities and more collaboration spaces.
Many large US corporates are looking to consolidate portfolios, with single, larger campuses and higher-spec headquarters rather than multiple, smaller offices. As well as the traditional East and West Coast hubs, Houston and Dallas remain popular HQ locations, driven by energy sector investment. Houston’s high-specification office fit-out cost averages US$3,654 per m2.
New York continues to reign supreme as a global financial and professional services hub. Manhattan’s office sector, as a whole, has now recovered to its pre-pandemic leasing levels. Grand Central, the Plaza, Park Avenue, Fifth/Madison Avenue and Sixth Avenue/Rockefeller Center are the five core submarkets driving the resurgence, which is testament to the continued appeal of offices close to transportation nodes offering high-quality spaces and amenities. The San Francisco office market is showing signs of stabilising, having been weighed down by the rise of remote work, tech-industry turbulence and wider social issues in the city. Although the San Francisco office sector closed Q4 with an overall vacancy rate of 36.5 percent, the end of 2024 marked the first time in nearly five years that more space was leased than vacated. San Francisco’s burgeoning artificial intelligence sector is a bright spot for the local economy, with fresh demand from companies such as OpenAI, Anthropic and Databricks. Overall, AI companies signed 90 leases last year, up from 36 in 2023. In general, start-ups are looking for short leases of three years or less, giving them flexibility as they scale. This means they want fast-paced office fit-outs with high-quality but reversible features, to give them the agility to move on.
Los Angeles has seen a greater level of bid price escalation since 2024 (5% compared with the National Average of 3.2%), driven by the supply chain disruption and construction demand following the wildfire disasters in the surrounding area. Higher bid price escalation of 4% was also seen in other key growth markets of Tampa, Phoenix, Miami and Houston. The improving overall trajectory may yet be derailed by the dynamic political situation, with tariff decisions playing out. US occupiers are facing another period of disruption and uncertainty, which will influence capital planning decisions in 2025 and could reduce office demand, should the economy falter.
Canada weighed down by uncertainty
In Canada, political and economic uncertainty is weighing down the office market. With the election result now decided, there may be a renewed sense of confidence from Canadian occupiers as policies crystallise. Despite vacancy rates still creeping up, Q4 2024 was Downtown Toronto’s best quarter for office leasing in three years. There is a general downsizing trend, but this is generating office fit-out activity to create smarter spaces that provide the quality employees expect, with targeted investment in acoustics, ergonomic furniture and improved AV technology. Canada remains a relatively cheaper market than the US for office fit-out – and the most expensive market (Vancouver – US$3,351 per m2 for premium office space) is comparable to New York City’s lower-specification costs (US$3,582). The thriving tech and data centre markets in both the US and Canada, and consequential demand for specialist mechanical, electrical and plumbing (MEP) materials and skills is having a knock-on effect on overall office fit-out costs, especially for higher-specification projects. Given the pressure on the supply chains, some clients are looking to mitigate this by bundling MEP work together across multiple projects to maximise the use of specialist skills.
Emerging hotspots in Latin America
Latin America’s office fit-out costs are generally lower than those of its northern neighbours. However, it does have its more expensive markets such as Buenos Aires, Montevideo and Santiago (on average US$3,676, US$3,401 and US$3,460 per m2, respectively, for high-specification office fit-outs). Fluctuating costs across the Latin American market are being driven by a mix of factors including volatile currencies and high demand in fast-expanding economies. Price rises are also being exacerbated by a shortage of skilled labour to meet with demand, particularly in specialist areas services like sustainability and MEP.
The region is a tale of two types of market. In hotspots like Mexico, recent growth of the industrial and logistics sectors due to nearshoring trends, and accelerating tech and financial sectors, are causing high demand for high-specification, modern, flexible workspaces. Brazil and Colombia are both seeing strong growth, driven by investment in the technology, financial services and healthcare sectors. Conversely, some markets such as Argentina and Chile are experiencing the impact of political volatility, instability and slower economic growth. This is causing a cooling demand for office fit-out in these less stable markets. Despite this cooling, higher prices persist, as greater levels of risk are baked-in to project costs. Like in North America, there has been a region-wide shift towards hybrid working. This is seeing companies opt for smaller, more flexible spaces and satellite offices as they push for adaptable spaces that can better suit the mix of remote and in-office working.
The APAC office fit-out cost landscape
A mixed picture across Asia
In Japan, the trend for occupiers to upgrade their office environments to attract and retain employees has continued over the past 12 months, pushing up office rents and driving new fit-out activity in all major cities. Tokyo remains one of the most expensive cities in the world for construction because limited competition in the contractor market keeps costs high. Fitting out high-specification commercial office space comes at a high average of US$4,619 per m2 – comparable to Sydney and Los Angeles. Singapore saw an improvement in office take-up and occupancy in Q4 2024, which bodes well for the office fit-out market in 2025. Upcoming lease expiries and low precommitment levels for new offices are potential concerns, but overall, the flight to quality is set to continue, driving demand for high-spec office fit-outs in the central business district.
In a notable trend, Tokyo and Singapore are both emerging as global leaders for sustainable office space, with more than 80 percent of new developments green certified.
Hong Kong has a relatively high average cost US$4,575 per m2 for premium office space, but this market is still struggling with weakened demand. 2024 was a challenging year for Hong Kong’s office market, with oversupply and increasing vacancy rates. In 2025, new economic stimulus policies signalled by the Chinese government may lead to increased IPO activities in Hong Kong. This could bolster growth in the financial sector, driving a fresh wave of office fit-out demand for banking clients. With traditional hubs demanding high office fit-out costs, global companies continue to find value in Asia’s emerging markets. In Bangalore, for example, low-specification office fit-outs are particularly cost effective at an average of just US$531 per m2. India’s office market saw record leasing activity in 2024. The type of roles being concentrated in India have been gradually changing, as global employers reap the benefits of a well-educated workforce and low operating costs. A growing number of occupiers are now developing higher-quality space locally to help attract and retain talent, as competition rises. Global capability centres for international corporates continue to drive demand across key hubs in India. Some specialist materials and finishes are seeing price escalation, exacerbated by a spike in shipping costs which is specifically impacting international firms with strict guidelines around furniture and finishings across their global portfolios.
Australia and New Zealand on the rebound
Australia has been through a difficult few years economically, contending with stubborn inflation. However, signs of resurgence are now appearing. In Q4 2024, the economy expanded at the fastest pace in two years, which should serve to boost occupier confidence in 2025. The occupier landscape is going through a period of change across the Australian and New Zealand markets. Companies are needing to balance the drive to bring employees back to the office with keeping close control of costs. Many occupiers are carefully reviewing their portfolio requirements. New drivers are having a clear impact on how projects are delivered, with contractors and designers needing to optimise existing assets. There is an increased focus on re-use of furniture and the extension of office fit-outs beyond originally planned lifecycles, to drive sustainability goals.
Premium office space remains a valuable commodity across all markets in the region, reflecting increased employee expectations for attractive and amenity-rich spaces. In Sydney, the average cost of a high-end office fit-out is US$4,756 per m2 and, in Brisbane, US$4,415 per m2.
Due to Grade A shortages, asset owners are now also considering how to reposition medium specification, or Grade B, stock to better appeal to tenants and their employees.
Supply chain pressures have eased significantly in most markets, and occupiers are now enjoying a greater degree of confidence in shorter lead-in times for most materials. That said, a notable rise in supplier insolvencies and companies with major financial difficulties mean greater focus is being placed on procuring financially stable suppliers.
