SINGAPORE, JANUARY 23, 2024 – The cost to fit-out workplaces in Asia Pacific continues to rise, mirroring ongoing inflationary pressures, higher commodity prices and increased construction costs. According to global real estate consultant JLL’s (NYSE:JLL) Asia Pacific Fit-Out Cost Guide 2023/2024, the average cost to fit-out workplaces across the Asia Pacific region increased 0.5% year-on-year with the average fit-out cost per sqm rising to US$1,161, up from US$1,159 last year.

Leasing office space in sustainable buildings is becoming non-negotiable for occupiers committed to ESG. Among other factors, sustainable fit-outs are gaining prominence as an initiative to decarbonise workplaces. In a survey of 240 commercial real estate leaders across Asia Pacific, one-in-two cite sustainable fit-outs as a priority to be actioned within the next three years. This confirms that sustainability is now a key driver in the way occupiers acquire, fit-out, and manage their assets.

While ESG commitments are a key driver of sustainable fit-outs, cost savings over the long term can offset upfront capital expenditure (CAPEX) costs. Sustainable materials or pieces of equipment may be more expensive upfront but those with better energy ratings or longer lifespans will save businesses money in the long run.

Responding to inflationary pressures that projects are facing, one-third of JLL market leaders in Asia Pacific report that pursuing a sustainable design is dependent on the overall project cost and 56% confirmed that reduced CAPEX on initiatives was being considered as a means to work within budgets, the bulk of which was in Australia and Southeast Asian markets.