Savills Projects Office Fit Out Guide 2025
Asia Pacific
A comprehensive breakdown of fit out project costs across Asia Pacific, supporting capital planning and relocation budgets for diverse workspace solutions.
Download Fit Out Guide 2025
Market Trends: Insight into some of the key factors that are impacting workspace construction projects in each market. Notes & Recommendations: Key planning tips for areas of the market that should be considered when starting a new project. Timeline: Consideration of important scheduling points that should be factored into an occupier’s overall planning process when commencing with a workspace project. Budget Allocations: Understanding the typical cost relationships often included in many project budget processes in each market.
APAC Highlight
Office Fit Out Guide 2025
Office fit out Guide 2025
Australia
China
Malaysia
Hong Kong
Japan
New Zealand
South Korea
Philippines
Singapore
Thailand
Asia Pacific Regional Project Cost Guideline
Project scope of work conditions often differ from the needs of one Stakeholder Team to another. Within the office construction environment: finish quality, layout, mechanical requirements, acoustical treatments, and technology functions are some of the key scope of work items that have a major impact on how the costs and scheduling are derived. The regional summary below covers three forms of fit-out types for interior office projects that are often encountered throughout the region.
Commercial Office Interior Fit-out
Economical: The existing site conditions of a project site remain in place. Mechanical, ceiling systems, and wall systems are slightly adjusted. New finishes, furniture, and technology systems are installed.
L1
Common: The demised premises will need to be reconstructed after a demolition period has been completed. The new office will have new ceiling systems, mechanical systems, wall & door systems, furniture, finishes, and technology systems. New finishes and wall / furniture conditions remain at average grade.
Prime: All of the proposed conditions of the demised premises will be new with attention focused on higher-quality selection of materials and details. The new office will contain new ceiling systems, mechanical and electrical systems, upgraded IT Technology Room, high-quality wall systems, glass partitions / doors, and new floor finishes.
L2
L3
Download Asia Pacific Regional Project Cost Guideline
Savills Projects China
Beijing SHANGHAI, SHENZHEN, GUANGZHOU, NANJING, WUHAN
1201 Tower 1, China Central Place, 81 Jianguo Road, Chaoyang District, Beijing, China, 100025
Savills Property Services Company Limited
China Fit Out Guide 2025
Location
Daniel Wang
Contact
daniel.wang@savills.com.cn
Email
Project Management & Consultation Construction Management & Monitoring Technical Due Diligence Cost Management
Services
GC Procurement: 2-3 months. Design Development: 1.5 - 2.5 months. Construction Period: 4.5 months. Post Construction (authorities' approval): 2 weeks.
Average Timeline for Office Interior Projects
Design & Build Mode
The citywide vacancy rate in Beijing Grade A office market remains high (19.4% in 2024 Q3). Landlords have chosen to be competitive by lowering tenant rent costs or provide more incentives to secure quality Tenants. Therefore, costs often associated with fit-out / renovation work and potential construction schedule impacts have become a concern for Project Owners. Additionally, Landlords have started to experiment with the concept of offering a customized office (or managed office) solution for prospective Tenants. In this scenario, the Landlord is responsible for providing design and construction services based on the basic demand from Project Owners. All design and construction costs may often be incorporated into the overall rent. As a result of the managed office process trend, there is an expectation gap between Project Owners, who may have limited knowledge of local design / construction practices, and Landlords who plan to maximize the benefits of a delivered office solution. The Landlord’s appointed Contractor will execute an internal simplified tendering process with minimal input and direction from Project Owners. In response to this practice, it remains important to engage with a project management professional to liaise with the Landlord. Project management involvement establishes that the scope of work is being executed within the boundaries of the established budget, program, and schedule. In addition, the local construction bureau has updated their approval process to optimize the overall progress of construction projects from the previous year. Most fit-out and renovation projects now do not require Architects to submit drawings for fire service bureau’s review at the beginning of the project, but now only require the General Contractor to directly apply for construction permits. This does increase the responsibility of the Architect to satisfy the construction drawing requirements since the fire service bureau approval remains a requirement at the completion acceptance stage.
Current Construction Market Trends
As the political center of China, Project Owners should be sensitive to the annual fixed and non-fixed construction shutdown schedule: National Day, Chinese New Year, and the important forums, etc.. This impact often has a higher effect for project locations in the Dongcheng/Xicheng district. Local sourcing of furniture materials and technology equipment will assist in saving lead time and achieve sustainability purpose (LEED/WELL/ESG). Cost management services are often recommended over Quantity Surveyor services. Quantity Surveyor service requires additional qualifications. In Beijing market, a fire renovation / maintenance contractor must be nominated by Landlord, 50% A/C renovation / maintenance contractors are recommended by Landlord. The conflict between the applicability of old building fire protection facilities and the issuance of new fire protection codes every year leads to the need for Designers to evaluate potential costs in advance.
Market Notes & Recommendations
Additional 2 months.
Design, Construction Separate Mode
Proportional Budget Breakdown
Professional Fees: Project Management, Design, & Engineering
10%
Construction Fees (Landlord Managed): Major construction works at project site
60%
Furniture Fees: Management, procurement, & installation:
11%
Technology Fees (AV, IT, Security): Management, procurement, & installation
17%
Other Costs (Graphics, Relocation, & Fees): Project related specific costs
2%
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Savills Projects New Zealand
Auckland & Christchurch
L4, 33 Shortland St Auckland, 1010 New Zealand
New Zealand Fit Out Guide 2025
Bryan Kidd
bkidd@savills.co.nz.
Project Management & Client Supplied Equipment Management Site Due Diligence & Engineer to Contract Services
Anticipate 4-6 months of design. Allow 2 months for procurement of main contractor. Construction duration: 4-6 months. Site preparations: 4-8 weeks.
Previous increased in construction costs have normalized, with cost escalation now tracking closer in line with CPI increases on a year-on-year basis. Construction materials shortages have been largely overcome with increased domestic production capacity of some commonplace construction materials, although skilled labor shortages due to low net immigration are still prevalent. There exists a relatively shallow pool of quality contractors and sub-contractors to deliver a volume of work, with high barriers to entry for potential new or international parties. Shipping delays for imported materials and equipment are still present, with longer than usual delivery timeframes, however with increased certainty. A lack of local availability for specialist materials and equipment continues to place pressure on short programme projects with long lead time items becoming critical to early completion. Flexible procurement models including Early Contractor Involvement (ECI) can provide strategies to overcome these lead-time challenges. Local statutory approval authorities still maintain a monopoly on building consent approvals, with no access to private certification services. This presents programming challenges and external risks in delivering a project to a tight timeline. Consultant design costs are also high as the assessing authorities rely on client appointed peer reviewers for code compliance checks and reviews. The building code is complex, open to interpretation in some areas, and structural design standards are high compared to other markets due to ever increasing earthquake / seismic design standards.
Project timeframes should be prepared which allow for longer than expected durations for design and consenting stages. Cost plans should allow risk contingencies for planning delays, redesign costs, and construction variations due to design documentation changes. Imported goods should be identified very early, and a contractor appointed to place orders correspondingly, or novation be agreed to and procured by clients directly. Contractor capacity should be carefully considered prior to tendering, and financial health checks should be performed to ensure capability to deliver any new projects given current market workloads. Project time and financial contingencies should be in place for late-stage compliance issues being raised by statutory authorities with rework / additional work often being required when applying for completion certification.
7.5%
Construction Fees: Major construction works at project site
76%
Technology Fees (AV, IT, Security): Management, procurement, & installation:
5%
1.5%
Savills Projects Hong Kong
Hong Kong & Macau
RM 1209, 12/F, 1111 King’s Road, Taikoo Shing, Hong Kong
Hong Kong Fit Out Guide 2025
Paul Scroggie
Paul.Scroggie@savills.com.hk
Project Management & Cost Management Construction Administration & Cost+ (Procurement Methodology) Care+ (Day 2 / After Service Care)
Anticipate minimum 2-3 Months of Design (project dependent). Construction Time Period: 12-16 weeks. Site Preparations: 2-4 weeks (Stakeholder dependent).
Over the past five years, the construction market in Hong Kong has experienced significant changes, particularly in office fit-out projects. From 2019 to 2020, the average cost per square foot was relatively high, with consultant fees being quite substantial. This period marked the beginning of a steady increase in construction costs. Between 2021 and 2022, costs surged significantly, while consultant fees decreased moderately. The trend continued into 2023 and 2024, with costs reaching even higher levels and consultant fees further dropping to a lower proportion. Several factors contributed to these trends, including increased material prices, labor shortages, and heightened demand for construction services. Additionally, the government's focus on infrastructure development and urban renewal projects has driven up costs. In summary, the construction market in Hong Kong has experienced rising expenses and a decreasing proportion of consultant fees. These trends highlight the increasing financial demands of office fit-out projects in the region. Project stakeholders should be prepared for these financial challenges and plan accordingly to manage their budgets effectively.
Anticipate increase in upfront CAPEX incorporating sustainability and wellness certification for new office spaces in response to ESG focus in recent years. Technology integration driving addition costs and variables to budgeting in areas of IT, AV and Security. Market trend on uptake of agile and flexible designs to right-size their offices in Hong Kong. Landlords typically require 3 to 4 weeks of vetting and review for fit-out submissions. Recommended to be done in parallel during tendering to ensure timely mobilization and construction commencement. Allow construction period of minimum 12 weeks for a typical fit-out from bare shell state.
Construction Fit-Out Works (separate from MEP):Major construction works at project site
40%
18%
Var.
MEP Fit-Out Works: Minor MEP alteration works at project site
30%
Savills Projects Malaysia
Kuala Lumpur & Johor Bahru
6, Corporate Tower 9, Pavilion Damansara Heights, No.3 Jalan Damanlela, Pusat Bandar Damansara, 50490 Kuala Lumpur, Malaysia.
Malaysia Fit Out Guide 2025
Jamie Duncan
Jamie.Duncan@savills.com.my
Project Management & Consultation Move Management & Cost Management Workplace Design Services & Site Due Diligence
Anticipate 2-3 Months of Design (project dependent) Landlords have requested 5-7 months of procurement planning prior to construction activities. B-Construction Time Period: 12-16 weeks. C-Construction Time Period: 2-4 weeks. Site Preparations: 2-4 weeks (Stakeholder dependent)
Malaysia’s construction industry, particularly in key cities such as Kuala Lumpur, Penang, and Johor, has experienced significant shifts impacting budget and programme guidelines for commercial interior fit-out projects. Similar to other regions, the selection of construction teams, costs, and schedules are often influenced or controlled by building Landlords. This arrangement can limit the flexibility and negotiation power of project owners, creating uncertainties in initial budget planning and timeline development. To mitigate these risks, it is advisable to evaluate and confirm construction costs and schedules before finalizing lease agreements to avoid unforeseen financial and operational impacts. Additionally, regional shortages on labor and the increase demand for materials continue to put pressure on Landlords and Project Stakeholders to meet project deadlines. Large-scale developments in cities like Kuala Lumpur and Johor have absorbed much of the available labor and material resources, further straining the commercial interior fit-out market. In this environment, clear communication and proactive planning between all parties remain essential to maintain project efficiency. While Malaysia benefits from locally sourced construction materials, stakeholders in Kuala Lumpur, Penang, and Johor should remain mindful of potential cost implications, particularly for imported materials. Adhering to local building codes and compliance standards in these locations remain crucial to avoid delays and ensure project success. By addressing these challenges early, project teams can better manage costs, timelines, and deliverables.
Project stakeholders should anticipate a 20%-30% increase in construction costs compared to the previous year due to reduced availability of skilled construction teams in key markets like Kuala Lumpur, Penang, and Johor. Landlords in Malaysia have recently quoted 5-7 months for pre-construction activities such as planning, procurement, contract negotiation, and value engineering before actual construction work can begin at the project site. Utilizing locally sourced furniture, materials, and technology equipment is highly recommended to mitigate cost impacts and streamline procurement processes. Engaging a local architectural or design team is strongly advised, as they are familiar with Malaysia’s building codes and regulatory requirements. All construction drawings and specifications must comply with Malaysian standards. Malaysia imposes a 8% Sales and Service Tax (SST) on goods and services. Project stakeholders should incorporate this into budget planning during development.
57%
15%
C-Construction Fees (Stakeholder Managed): Minor construction works at project site
6%
Savills Projects Japan
Tokyo & Osaka
Toho Hibiya Promenade Building, 8th Floor 1-5-2 Yurakucho, Chiyoda-ku, Tokyo Japan 100-0006
Japan Fit Out Guide 2025
Issei Higashijima
ihigashijima@savills.co.jp.
Project Management & Consultation Furniture / Relocation Management & Cost Management Workplace Design Services & Site Due Diligence
Anticipate 2-3 Months of Design (project dependent) Landlords have requested 5-7 months of procurement Planning prior to construction activities. B-Construction Time Period: 12-16 weeks. C-Construction Time Period: 2-4 weeks. Site Preparations: 2-4 weeks (Stakeholder dependent)
Over the past six months, the construction environment in Tokyo has witnessed various changes that have impacted the budget and scheduling of an average commercial interior fit-out project. The construction team selection, construction costs, and the construction schedule are often developed and managed by the Landlord of a building. As a result of this arrangement, Project Owners often find that they have minimal flexibility and negotiation power to manage a project independently. The procurement arrangement often drives uncertainty during the schedule development process and fosters uncertainty in the initial budget planning. It is recommended to review and determine construction costs and schedule parameters prior to signing a lease agreement with a Landlord in order to avoid additional financial costs that may impact project and operational expenses. Additionally, Landlord Teams have recently advised that the cost of construction has increased sharply due to the shortage of labor throughout the Japan market. Several large-scale projects throughout the country have diverted labor and materials away from commercial interior project market. As a result, this impact has applied additional pressure on both Landlords and Project Stakeholders to complete projects within agreed parameters. The impact of the exchange rate between the Japanese Yen and the United States Dollar has assisted international companies manage capital expenditure and operational costs. However, Project Stakeholders should expect that the import of materials and goods will impact their overall budget. At this time, most construction materials are accessible and locally sourced. Construction, furniture, and technology materials must comply with Japanese codes and be compliant with local laws.
Project Stakeholders should prepare for 20%-30% increase in construction costs from the previous year due to the reduced availability of construction teams in the market. Landlords have recently quoted 5-7 months of B-Construction planning, procurement, construction contract negotiation, and value engineering prior to actual construction work commencing at the project site. Local sourcing of furniture materials and technology equipment will assist in the procurement of materials and the cost impacts of a project budget. The use of local architectural / design team is highly recommended in this market. All of the construction drawings and specification materials need to be in Japanese. There is currently a 10% consumption tax on all goods and services in Japan. Project Stakeholders should plan for the 10% increase during the development of budgets. B-Construction services performed by Landlord and the C-Construction services often will not overlap during the project schedule.
Savills Projects Thailand
26/F Abdulrahim Place, 990 Rama IV Road, Silom, Bangrak, Bangkok 10500 Thailand
Thailand Fit Out Guide 2025
Gregory Maier
greg.maier@savills.com.sg
Project Management & Consultation Furniture / Relocation Management Cost Management & Workplace Design Services Site Due Diligence & Design & Build Cost + Procurement
Anticipate 2-3 Months of Design (project dependent) Landlords Approval 1-2 months. Construction Time Period: 12-16 weeks. Site Preparations: 2-4 weeks (Stakeholder dependent)
The construction market in Thailand is currently undergoing significant transformation, driven by several key trends. These trends reflect both long-term structural shifts and responses to short-term challenges. Below are some of the most prominent trends shaping Thailand’s construction market: The Thai government continues to prioritize infrastructure development, making it one of the primary drivers of growth in the construction sector. Key projects include the expansion of transportation networks, such as new highways, mass transit systems, and the development of new airports. The Eastern Economic Corridor (EEC) is a major focus, aimed at turning Thailand into a regional hub for industries like technology, innovation, and logistics. This initiative is bringing large-scale infrastructure projects like smart cities, industrial parks, and logistics hubs, fueling investment and accelerating economic growth Sustainability is gaining momentum in the construction industry, with increasing demand for green building certifications like LEED (Leadership in Energy and Environmental Design) and TREES (Thailand's Rating System for Sustainable Buildings). Developers are adopting energy-efficient designs and materials to reduce environmental impact and meet regulatory requirements. Thailand’s construction market is evolving in response to both internal and external factors, with a focus on sustainability, innovation, and urbanization. Key trends include massive government infrastructure investments, the rise of green and energy-efficient buildings, the growing influence of technology, and increasing foreign interest in the sector. Overall, Thailand’s construction market is expected to continue its growth trajectory, supported by ongoing infrastructure development, urbanization, and a commitment to modernization and innovation
Construction costs in Thailand have been increasing by an estimated 6-8% annually year on year Prices for construction materials such as steel, cement, lumber, and aluminum have been steadily rising due to global supply chain disruptions, increased transportation costs, and high demand from both domestic and international markets The shortage of skilled labor has made it more expensive to hire workers, leading to wage inflation in the construction sector. This has added approximately 3-5% to labor costs annually in certain regions Thailand’s regulatory environment can be complex, especially in Bangkok, where land use is tightly controlled, and building permits require thorough review. Early engagement with regulatory bodies and ensuring all necessary permits are in place will help avoid delays and costly penalties.. The construction market in Thailand is influenced by global economic conditions, inflation, and material costs. Regularly review market trends, economic indicators, and government policies to adapt to changes and seize opportunities as they arise
8%
Construction Fees (Builders Work): Major construction works at project site
41%
7%
12%
C-Construction Fees (MEP Works): Minor construction works at project site
Savills Projects Philippines
Metro Manila (Luzon) & Cebu & Davao (VisMin)
20F Arthaland Century Pacific Tower, 5th Avenue cor. 30th Street, Bonifacio Global City, Taguig Philippines 1634
Philippines Fit Out Guide 2025
Michelle Amarnani
info@t1projectservices.co
Project Management Commercial & Cost Management Design & Construction Workplace Design Services Site Due Diligence
Anticipate 2-3 Months of Design (project dependent) Statutory Approvals & Permitting: 4-6 weeks B-Construction Time Period: 8 weeks. C-Construction Time Period: 12-14 weeks. Site Preparations: 2 weeks (Stakeholder dependent)
The commercial fit-out market in Manila is evolving, driven by demand for flexible, sustainable workspaces and more efficient construction practices. Companies are prioritizing adaptable office layouts to support expansion & hybrid work models, adding value by creating spaces that can evolve with business needs. Sustainability is also a growing focus, with Tenants and Landlords incorporating eco-friendly materials and energy-efficient systems that align with the Philippine Green Building Codes, while Tenant's interest in locating LEED Certified Buildings is increasing. Material prices fluctuate due to supply chain disruptions and currency fluctuations. Locally sourced materials, priced 20% to 30% lower than imports, remain competitive. Regulatory compliance and streamlining permit processes remains vital to minimize delays and costs. Additionally, demand for quality fit-outs is now rising, putting pressure on the vendor pool, supply chain, and timelines. Mixed-use developments across the Philippines support the market by creating integrated communities that blend work, living, and leisure, making these locations especially attractive for companies seeking vibrant office spaces.
Project Stakeholders should prepare for an increase in construction costs in line with CPI from the previous year due to large price hikes in recent years. B-Construction - Landlord’s Nominated Sub-Contractors usually cover FDAS, Fire Protection and sometimes Mechanical. Local sourcing of furniture materials and technology equipment will assist in the procurement of materials and the cost impacts of a project budget. The use of local architectural / design team involvement is highly recommended in this market, as knowledge of locally available materials is essential in order to reach acceptable timelines. C-Construction - The Stakeholder has the prerogative to procure and manage the majority if the office fit out.
9%
59%
Savills Projects South Korea
Seoul Metropolitan
13F Seoul Finance Center, 136, Sejong-daero, Jung-gu, Seoul, South Korea, 04520
South Korea Fit Out Guide 2025
Dongwan Roh
dongwan.roh@savills.co.kr
Project Management & Consultation Furniture / Relocation Management Cost Management & Construction Management Technical Due Diligence
Anticipate 1-3 Months of Design (Project dependent) Building permit : 1~3 Months (If require, project dependent) Construction Time Period: 6 ~ 8 weeks (Project dependent) Site Preparations: 1-2 weeks (Stakeholder dependent) Occupancy Certificate & Registration Tax : 1~2 Months (If required, project dependent)
The COVID-19 pandemic caused significant disruptions in the construction industry, with supply chain shocks driving up raw material costs and shipping delays resulting in higher construction costs and longer lead times. The shift to work-from-home and hybrid models reshaped office space demands, prompting many businesses to downsize and focus on reducing Net Floor Area (NFA) to optimize expenses. The weakened Korean won and general inflation further escalated costs, with labor costs rising sharply due to increased minimum wages and overtime rates. Office fit-out projects, often conducted at night or on weekends, incur labor premiums of 30–40%. Growing ESG priorities have also driven demand for sustainable materials and embodied carbon analysis, adding to overall project costs. Post-pandemic inflation and rising interest rates have constrained development opportunities as tighter financing and increased risk aversion from banks have made funding more challenging. These factors highlight the need for strategic planning and risk management to navigate South Korea’s evolving construction market. Inflation and rising interest rates have also constrained development opportunities and real estate transactions. Financial institutions, wary of default risks, have tightened project financing, refinancing, and business loans, making it more challenging to secure funding for new developments. This combination of factors underscores the need for strategic planning and risk management in project management to adapt to the evolving challenges of South Korea’s construction market.
Stakeholders should allocate a contingency budget of 10–15% of the total construction cost during the planning stage to account for market fluctuations. Prioritize sourcing finish materials, furniture, and other items locally, as imported goods may face extended lead times of up to three months. Consult project managers for recommendations on local architects and design teams who can secure government permits efficiently, as this is critical for maintaining project schedules. Be aware that South Korea mandates the e-tax system with a fixed 10% VAT on all transactions unless the client qualifies for exemption (e.g., Embassies, NPOs, or VAT-exempt entities) Engage a project manager early during business planning to address building permit requirements, which can significantly affect the project timeline. South Korea’s hierarchical business culture can influence project communication and decision-making. Understanding these dynamics can enhance collaboration with local partners and stakeholders.
Construction Fees (Client): Major construction works at project site
62%
Savills Projects Singapore
30 Cecil Street, #20-03 Prudential Tower Singapore 049712
Singapore Fit Out Guide 2025
Vincent Lau
vincent.lau@savills.com.sg
Project Management & Consultation Cost Plus & Furniture / Relocation Management Cost Management & Workplace Design Services Site Technical Due Diligence
Anticipate 2-3 Months of Design (project dependent) Authority Permitting & Approval : 3 to 4 weeks Construction Time Period for Office under 40,000sf : 12-16 weeks. Construction Time Period for Office under 5,000sf : 3-6 weeks. Site Preparations: 2-4 weeks (Stakeholder dependent)
Over the past nine months, corporate office demand has softened as occupiers remain cautious amidst economic uncertainty, high interest rates, and restructuring activities within major sectors such as technology and finance. Many companies have opted to renew their leases or transition to pre-fitted units, reducing renovation expenditures and focusing on cost-saving strategies. Sustainability and ESG (Environmental, Social, and Governance) priorities continue to shape the renovation landscape. Projects increasingly emphasize employee wellness by integrating features such as energy-efficient systems, improved air quality, and green-certified building standards. In terms of design, there is a growing focus on creating multi-functional layouts, collaborative spaces, and robust IT infrastructure to accommodate hybrid working models. During 2025, Singapore's corporate office renovation demand is expected to reflect broader real estate and economic trends. Companies are likely to prioritize enhancing existing spaces over relocation as they aim to optimize costs amid global uncertainties. However, the introduction of new office developments, including Keppel South Central, Paya Lebar Green, and Shaw Tower, will present fresh opportunities for fit-out projects and upgrades. While global economic pressures and elevated costs remain challenges, the renovation market is poised to benefit from businesses prioritizing workforce-centric upgrades and adherence to green building standards. That said, demand may remain uneven, with growth concentrated in high-value sectors and premium Grade-A office spaces. Despite cautious sentiment influenced by U.S. economic and political conditions, localized factors such as new office completions and sustainability-driven innovation are fostering promising opportunities within Singapore's corporate leasing and renovation market.
Project stakeholders should anticipate a 5% to 8% increase in construction costs compared to the previous year, driven by reduced availability of materials and resources, alongside ongoing geopolitical and economic uncertainties. Effective procurement strategies will remain a critical priority prior to project initiation. Clients will need to carefully balance their risk exposure with project timelines to ensure cost efficiency while meeting deadlines. IT, sustainability, and ESG (Environmental, Social, and Governance) considerations will continue to significantly influence various aspects of projects. Early engagement of relevant stakeholders and the involvement of specialized experts will be essential in the project planning phase to ensure these elements are properly integrated from the outset.
65%
Savills Projects Australia
Sydney, Brisbane, Melbourne, Adelaide, Perth
Australia Fit Out Guide 2025
Ken Ng
kng@savills.com.au
We provide end-to-end project development and consultancy expertise, covering the full lifecycle of a project: Project Management Property Consultancy Development Management Independent Certification Superintendence
Anticipate 3 months of design Minimum 2 months tender and award Typical - 3 months construction duration Hybrid procurement approaches such as Early Contractor Involvement or Design and Construct are required where time does not permit. However, this typically incurs either a cost or quality penalty to occupiers
A snapshot of Savills Australian Office Briefing Spotlight November-24 details the following: Upside risks to inflation are scaling back the rate cutting cycle. Sydney remains the focal point for capital at 63% of office acquisitions year to date 2024. Investors remain more cautious on Melbourne. The average size of tenant requirements is significantly lower than 2023 levels. Brisbane continues to see strong rental growth. Mining and financial services have been the key industries driving leasing activity in Perth. Consistent with the above, Quantity Surveyors are overwhelmingly reporting consistent escalation in construction pricing exceeding 5% per year across the country and in cities with labor shortages over 10%: Sydney infrastructure spending underpins the market while the industry grapples with insolvencies and rising labor costs. Melbourne is stabilizing, but again labor availability remains and issue. Brisbane battles with low productivity labor shortages and industrial action extending project durations. Whilst fit-out projects are somewhat isolated from the macro trends outlined above, Savills considers extensive market engagement prior to tender and well documented projects are achieving the best outcomes for our Clients.
An allowance of 4-5% escalation should be included as a minimum for 2025 Commencing leasing early is recommended to allow adequate time for protracted negotiations, robust design development and longer tender durations (up to 6 weeks for a typical full floor fit-out). Whilst availability and supply issues are easing, lead times up to 14 weeks for overseas procurements remain resulting in alternatives and onshore selections. Standards vary from State to State, such as in Queensland which requires locally accredited and registered consultants and builders. Joint ventures are often required for any offshore designed projects. Allow for local taxes, levies, certification regimes and legislation associated with construction projects which vary from state to state.
Builders Works: Major construction works at project site
72%
Client Direct Procurements: Minor construction works at project site
20%
