The cost to fit out an office in key locations across Asia Pacific has continued to rise, although at a slowing rate, according to findings from Cushman & Wakefield’s 2025 Fit Out Cost Guide.

The global real estate service provider’s annual report showed fit out costs range from US$195 per square foot (psf) in Tokyo to US$58 psf in Jakarta. Similarly, to previous years and in line with expectations, Japanese cities were the most expensive markets while Southeast Asian cities were the most affordable locations for office fit outs. 

While there was some fluctuation at a market level and within local currencies, the ranking of most to least expensive fit out costs in US dollars per square foot remained largely unchanged, though gaps have narrowed between some markets. Market movers included:

• Hong Kong jumped from 9th to 5th most expensive, overtaking Auckland, Seoul, Sydney and Melbourne, propelled by the strong US dollar to which its currency is pegged. 
• Manila climbed from 20th to equal 17th with Shanghai, overtaking other Chinese mainland cities Shenzhen and Guangzhou which experienced declining rates
• Jakarta fell from 24th to 33rd position as occupiers opted for lower-spec fit outs, making it the most affordable fit out destination in the region, ahead of Ho Chi Minh City, which was the most affordable destination last year. 

Report author and Head of International Research, EMEA & APAC, Dr Dominic Brown said changes to local fit out costs were largely aligned with the economic outlook of each market and the related office leasing activity. 

“As a region, Asia Pacific is one of the more expansionary, and we have seen more growth and slightly more positive sentiment about the market by contractors here than in other regions.

“Measured by both contractor sentiment and actual cost, it appears that the worst of the pricing pressure from recent years has resolved and prices for raw materials are on the way down, while tight labour markets continue to drive some wage inflation.”

Asia Pacific Head of Project & Development Services Tom Gibson said, “We have seen an uptick in retrofit and upgrade activity across the region as more clients opt for lease renewals over relocations. In almost all cases, the employee experience remains a key focus for occupiers, with these higher quality fit outs continuing to place upward pressure on costs in most markets.”

In local currency, North Asian cities including Tokyo, Seoul and Osaka saw the greatest fit out cost inflation of around 16%, followed by Australian cities, which averaged 11%. Jakarta saw the greatest decrease in costs (-16%); Chinese mainland cities also saw declines. India recorded steady inflation of around 3% in most cities.

Key findings for Australia & New Zealand

• The Australian market has shown resilience with fit out costs stabilising; a moderate increase in capital expenditure budgets is anticipated to accommodate evolving workplace strategies.
• Stability in lead times is a positive sign for project timelines in 2025.
• Companies should plan for higher expenditure in Sydney and Melbourne, which, as key business hubs, remain the most expensive locations for office fit outs, especially for advanced hybrid workspaces.
• Despite the economic volatility, the Australian office market is expected to experience stronger growth in 2025 compared to 2024. This growth will be driven by increased demand for high-quality office spaces that support hybrid working models.

Mitch Wilson, Cushman & Wakefield’s Head of Project & Development Services for Australia and New Zealand, said “Australian fit out costs are up 10% y-o-y (in local currency), but stable in USD and we anticipate a moderate increase in capital expenditure budgets to accommodate evolving workplace strategies throughout the year.

 “Sydney and Melbourne continue to lead in fit out costs within Australia, reflecting their status as key business hubs. Companies should plan for higher expenditures in these cities, especially for advanced hybrid workspaces.

 “With the economy poised to recover, the Australian office market is expected to experience stronger growth in 2025 compared to 2024. This growth will be driven by increased demand for high-quality office spaces that support hybrid working models.

 According to data from Cushman & Wakefield’s contractor sentiment survey across Australia and New Zealand, 96% of companies expect their pricing to be stable or slightly increased over the next six months, with 40% expecting stability and 56% anticipating an increase. Similarly, 88% of vendors expect their pricing to be stable or slightly increased, with 36% expecting stability and 52% anticipating an increase.”

 Mr Wilson said, “Labour costs are also expected to remain stable or slightly increase, with 36% expecting stability and 56% anticipating an increase. Additionally, 96% of companies expect materials costs to be stable or slightly increased, with 20% expecting stability and 76% anticipating an increase. In terms of fit out costs, there has been approximately a 10% increase over the last year for Australian cities.”

 For New Zealand:

 Todd Hanrahan, Cushman & Wakefield’s Head of Project & Development Services for New Zealand, said, "New Zealand's fit out costs are up 14% y-o-y but have remained relatively stable in USD, and we are seeing a slight increase in labour costs, particularly in Auckland.

 “This trend is expected to continue into 2025, necessitating careful budget planning for new projects. While the market is recovering, investors and occupiers remain cautious in their spending, reinforcing the need for accuracy and financial prudence. Auckland remains the most expensive city for office fit outs in New Zealand, with costs driven by high demand and limited supply. In terms of fit out costs, there has been a 14% increase over the last year for Auckland.”

About the Fit Out Cost Guide

Cushman & Wakefield’s Fit Out Cost Guide is an annual publication providing cost breakdowns for office fit outs, refurbishments and reinstatements for key office markets across the region. This year, the report includes two new sections: findings from a Contractor Sentiment Survey and an online calculator for estimating capital expenditure.