Singapore is most expensive city in South-east Asia for fitting out offices

Singapore

SINGAPORE recorded the highest average fit-out cost for offices across South-east Asia, at US$112 per square foot (psf), Cushman & Wakefield said on Tuesday.

This was despite the city-state's average cost having already fallen from US$115 psf a year ago, said the real estate services firm's analysis for 2020-2021.

Mechanical and engineering works made up the largest proportion of fit-out costs for Singapore offices, followed closely by building works.

After Singapore, South-east Asia's next most expensive city for fitting out new offices is Manila, with an average cost of US$87 psf, followed by Bangkok at US$85 psf and Kuala Lumpur, US$83 psf.

In reinstatement costs - the amount needed to restore office premises to their original condition - Manila took the top spot in South-east Asia with an average of US$39 psf. Singapore was runner-up with the second-highest average figure - US$17 psf.

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Across the broader Asia-Pacific region, Singapore was ranked the 15th most expensive city in terms of fit-out cost. The three costliest cities of the region are all in Japan; Tokyo maintained its top position with an average fit-out cost of US$201 psf, followed by Osaka at US$193 psf, and Nagoya, at US$188.

In its study, Cushman & Wakefield compared the costs of furniture, mechanical and engineering works, building works, audio-visual and IT in 31 cities across the Asia-Pacific, and based its assessment on low, average and high-quality specification projects.

Grant Carter, director of project development services at Cushman & Wakefield Singapore, noted that the Republic's main contractors and their supply chains have faced challenges with the stoppage of work during Singapore's "circuit-breaker" period.

This also came as construction firms whose workers lived in dormitories with confirmed Covid-19 cases had to shut down, resulting in labour shortages, he said.

Still, given that Singapore's office fit-out costs are lower than in some Asia-Pacific markets, the city-state may become more attractive as a regional hub for blue-chip firms to set up shop.

In the overall region, the Covid-19 pandemic has caused a reversal of the previous uptrend in office fit-out costs in most markets, said Tom Gibson, head of project and development services for the Asia-Pacific at Cushman & Wakefield.

The current downtrend "is likely to persist as corporate occupiers continue to assess their capital expenditure budgets and corporate footprint requirements", he added.

Cushman & Wakefield has observed greater integration of workplace strategy expertise into the early stages of the design and fit-out process.

"With work lifestyles and preferences evolving following the pandemic, companies are increasingly focused on aligning their space requirements with efficient workplace strategies and human-resource policies to better meet their corporate business and financial goals," Mr Gibson said.