Hong Kong is cheaper than Tokyo and Sydney in office fit-out costs, study shows

By Sandy Li sandy.li@scmp.com / https://www.scmp.com/business/article/3036334/hong-kong-cheaper-tokyo-and-sydney-office-fit-out-costs-study-shows?utm_medium=partner&utm_campaign=contentexchange&utm_source=EdgeProp | November 26, 2019 11:57 AM SGT
The cost to fit out a new office in Hong Kong is cheaper than six major Japanese or Australian cities, a new study shows. That is a small consolation for prospective tenants in a city with the highest rentals in the past four years.
At US$130 per square foot, Hong Kong ranks seventh among 28 gateway cities in Asia-Pacific region, according to the inaugural fit-out guide published by Chicago-based property consultancy Cushman & Wakefield. This works out to be 35.6 per cent lower than US$202 in Tokyo, and 16 per cent below US$154 in Sydney, the ranking shows. At US$70 per square foot, Taipei is the most economical of the lot.
"Cheaper labour cost, furniture, fixtures and equipment, and construction materials are the main drivers for lower office fit-out costs in Hong Kong" compared with those in Japan and Australia, said Tom Gibson, managing director of project & development services.
Hong Kong holds the unenviable record as the most expensive city for office space, where rents in prime buildings in Central districts have topped any city in the world for a fourth straight year, US real estate services group CBRE said in June. Supply shortage, and demand from banks and mainland Chinese companies, have pushed up rentals in recent years.
The Cushman & Wakefield guide aims to help office occupiers define their capital planning and relocation budgets. It includes a cost breakdown on components such as furniture, mechanical and electrical works, builder works and audiovisual/information technology, while taking into consideration the reinstatement cost in Asia-Pacific.
"Builders' works is still the most expensive component in new office fit-out projects," said Bryant Cheung, director and head of project & development services in Hong Kong at Cushman & Wakefield.
"However, the cost of AV/IT technology has soared considerably, given the rise of remote working, virtual conferencing and co-working places."
In Hong Kong, builder works account for 35 per cent of all-in costs, while mechanical and electrical...