Organisations to pay more for workspace upgrade: report

Singapore has a US$101 fit-out cost per square feet.

Organisations should expect to pay more to redesign or upgrade their workspaces in 2021, despite many trying to decrease capital expenditure due to the financial impact of the pandemic, according to the latest JLL report.

The report noted that the average fit-out cost rose 4.7% YoY across the region, with labor shortages, health and safety considerations, material availability, and higher delivery costs as the main price drivers.

Singapore ranks 10th in Asia Pacific with US$101 fit-out cost per square feet. A recession in 2020 is denting office space demand in the city, and leasing demand remains relatively weak with tenants focussed on cost savings.

However, Singapore’s position as a key market means it is well-positioned to attract companies looking to set up bases in Asia Pacific. This should support demand in the medium term.

Despite overall rising costs in Asia Pacific, JLL believes this will not deter most companies from investing in safe and productive work environments for their employees. The firm mentions that whilst organisations may be re-examining their real estate footprint, workspaces still play an integral role in preserving a company’s corporate culture.

“In many ways, employees have become consumers of the workplace and make choices about where and how they work, so I believe investing in a flexible environment pays back in terms of employee engagement,” JLL Asia Pacific executive managing director Martin Hinge said.