A new report by Cushman & Wakefield reveals that cities in the UK and Germany dominate the list of most expensive locations in the EMEA region for office fit-outs.
This trend is driven by occupiers prioritizing workspaces that foster collaboration, enhance productivity, and align with sustainability goals.
The report, titled "EMEA Office Fit-Out Cost Guide," analyzes 43 key cities across the region and provides average fit-out costs based on different standards.
The study shows a significant cost disparity between cities in Germany and the UK compared to other EMEA regions. London takes the top spot with an average office fit-out cost of €2,629 per m2. Hamburg follows closely behind as the most expensive city in Northern Europe (€2,463). Within Central & Eastern Europe, Prague leads the pack at €1,252 per m2, while Paris reigns supreme in Southern Europe (€1,190).
EMEA-wide fit-out costs have risen by an average of 4% in euros over the past year. High-quality fit-outs now average €2,295 per m2 (all-inclusive). The elevated costs in UK and German cities are attributed to a growing emphasis on sophisticated designs, technology solutions, and fit-out quality in these regions.
Nic Wilkinson, chair of Project & 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 trend towards securing the best quality office space is likely to continue. However, a lack of development options might force some tenants to renew or extend their current leases if they can't find the perfect fit.
Looking at the bigger picture, economic factors and office space demand suggest the worst may be over for construction pricing.
Wilkinson added: ‘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.’
