Hong Kong rises to fifth most expensive office fit out market in Asia Pacific
- Office fit out costs are continuing to rise across Asia Pacific, with some markets experiencing a slowdown in the rate of this increase.
- In Greater China, six cities are ranked among the top 20 most expensive office fit out markets, with Hong Kong moving up significantly.
- The report indicates a recovering market sentiment for contractors in Asia Pacific as pricing pressures have begun to ease.
On March 24, 2025, findings from Cushman & Wakefield's Asia Pacific Fit Out Cost Guide revealed that the cost of office fit outs is on the rise across key locations in the Asia Pacific region, although the rate of increase has started to slow. The report indicates that six cities in Greater China made it to the top 20 most expensive office fit out markets in Asia Pacific, highlighting Hong Kong's significant rise in rankings, moving from ninth to fifth place in the region. This increase is attributed to a strong US dollar impacting the local Hong Kong dollar, thus making fit outs more costly in local currency. The report illustrated that Tokyo remains the most expensive market for office fit outs at US$195 per square foot, followed closely by Osaka and Nagoya, with costs in other cities like Beijing and Shanghai also notable. Specifically for Greater China, Hong Kong's basic fit out cost is reported at US$160 per square foot, showcasing a significant level of expense compared to its neighbors. The cost trends were influenced by economic conditions, including growth rates and leasing activity across different markets in Asia. Contractors seem to have a more positive outlook on market conditions in Asia Pacific compared to other regions. Dr. Dominic Brown, the report’s author, conveyed that contractor sentiment has improved, with indications that the most severe pressures on fit out pricing are beginning to ease. This can be correlated with a slight decline in costs for raw materials and ongoing wage inflation due to tight labor markets in some areas. Conversely, the economic slowdown in mainland China has resulted in caution among tenants regarding office leasing decisions. As a result, while inflation rates for fit out costs show disparities—most notably high in North Asian cities and lower in Southeast Asian markets—the ranking of expenses remains consistent. The report highlights that cities such as Tokyo lead the trend, but the caution observed in Chinese mainland cities like Beijing and Shanghai hints at a more subdued market in these areas due to broader economic uncertainties and local market adjustments. This comprehensive analysis provides insights into shifting market dynamics and regional economic patterns shaping office fit out costs in Asia.