London has topped the rankings for the most expensive cities in Europe to fit out an office, according to the latest research from Cushman & Wakefield.
Locations in the UK and Germany far outstripped other parts of EMEA for average cost per city. The average for office fit-outs in London was €2,629 (£2,251) per sq m.
Hamburg was second on the list, which covers 43 cities, and was the most expensive city in the Northern Europe region at €2,463.
Manchester was the second-most expensive UK city in the rankings, with average fit-out costs amounting to €2,231, followed by Birmingham (€2,165) and Glasgow (€2,055). In Ireland, fit-outs averaged €2,060 in Dublin.
Researchers said high fit-out costs in the UK and Germany are driven by “elevated expectations” in terms of design sophistication, technology solutions and quality of fit-out.
Prague (€1,252 per sq m) was top within the Central and Eastern Europe market, while Paris stood at €1,190. Cairo (€1,759) and Riyadh (€1,650) were the most expensive of the key African and Middle Eastern cities respectively.
Fit-out costs across the EMEA regions rose by an average of 4% in euro currency terms over the past year, with high-quality fit-outs averaging €2,295 per sq m.
Nic Wilkinson, chair of project and development services EMEA at Cushman & Wakefield, said: “The office sector is undergoing significant structural change, while the global economy is encountering cyclical headwinds resulting in scrutiny of capital expenditure budgets.
“Add in the need to factor in underlying market cycles and it is easy to appreciate why many believe the current environment has never been more complex. Without diminishing the scale of these issues, they can be summarised as cost, carbon and culture.
“The office fit-out plays an important role in each of these areas by creating an environment in which employees can be productive, innovate and connect with colleagues, while simultaneously creating value and helping achieve corporate sustainability and inclusiveness goals.”
Cushman said that the focus towards the best-quality space is expected to remain. With fewer development options, some tenants may choose to renew or extend their lease where they are unable to secure the right space.
Wilkinson added: “We have seen a flight to quality in office space demand, and we also expect a flight to quality in contractor hiring. While overall space requirements may be down on last year, top operators are still expected to see healthy demand for their services.
“We also believe the fit-out typology also needs to evolve. Occupiers are devoting a greater proportion of space to collaborative work and employee wellbeing, the latter being an area that has seen consistently low workplace experience scores over the past few years.”
Photo © Thomas Krych/ZUMA Press Wire/Shutterstock
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