High material costs, demand for high-quality space and a shortage of specialist skills have helped push office fit-out costs in London higher than anywhere else in the world.
Research by consultancy Turner & Townsend has found the average high-specification project in the capital had hit £4,671 per sq m (£434 per sq ft), with the second most being £4,470 per sq m in New York and £4,299 per sq m in Zurich.
The Global Occupier Fit-Out Report 2025 found occupiers have high-spec requirements, such as the latest audio-visual technology, premium mechanical, engineering and plumbing, and sustainable design and operation. The specialist skills required provide these were found to be double the cost of the equivalent in New York.
Increased building safety regulations and the ongoing shortage of specialist skills, such as those of Chartered Fire Engineers, are also thought to be contributing to the spike in costs.
The cost of fit-out in London is particularly high in comparison to the basic cost of construction, for which it ranked 10th globally in Turner & Townsend’s International Construction Market Survey last year.
Nadia de Klerk, global head of occupier and retail at Turner & Townsend, said: “In London we are seeing a perfect storm. The gathering pace of return to office working, coupled with skilled trades shortages and high building material prices, have resulted in commercial fit-out costs being the world’s most expensive.
“Given these pressures, alongside other geopolitical headwinds, it’s more important than ever that real estate teams around the world arm themselves with data and insight. This is essential for horizon scanning and evidence-backed decision-making, not to mention accurate benchmarking of fit-out projects to inform investment.”
In light of its findings, the report suggested making better use of locally sourced materials to cut costs and reduce the impact of emerging tariffs, while also reducing the carbon footprint of fit-outs.
Image © Jason Hawkes Aerial Photography
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