SINGAPORE, Dec 8, 2020, BT. 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 already falling from US$115 psf a year ago, according to the real estate services firm’s analysis for 2020-2021, The Business Times reported.
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 was Manila with an average cost of US$87 psf, followed by Bangkok at US$85 psf and Kuala Lumpur at US$83 psf.
As for reinstatement cost – 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 recorded the second-highest average reinstatement cost, at US$17 psf.
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 were 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 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, Mr Carter said.
Still, given that Singapore’s office fit-out costs are lower than 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 most markets this year to see a reversal of the previous uptrend in office fit-out costs, said Tom Gibson, head of project and development services for 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 is 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 human-resource policies to better meet their corporate business and financial goals,” Mr Gibson noted.