Auckland ranks 9th in Asia Pacific Office Fit-Out Cost
Auckland ranks 9th in 2019/20 Asia Pacific Office Fit-Out Cost Guide
City rises two places in annual APAC office fit-out index; higher comparative cost of furniture in NZ should not discourage companies from maximising potential of progressive workspaces.
Auckland, 26 November 2019 – New trends in flexible and collaborative working may be driving down the global cost of office fit-outs, but according to the latest research from JLL, Auckland’s comparative affordability within the Asia Pacific context is slipping under the pressure of a strong leasing market and competition for labour.
Auckland has risen two places to 9th out of the 29 cities in JLL’s 2019/20 Asia Pacific Office Fit-out Cost Guide, overtaking Seoul, Colombo and Taipei and remaining ahead of Kuala Lumpur, Bangkok, Manila and all the major Chinese centres. Tokyo – which is still experiencing a construction boom ahead of next year’s Olympics – remains the most expensive city on the list, while Auckland remains less expensive than those in all major centres across the Tasman, including Canberra which has been added to the Index for the first time this year.
JLL’s Head of Leasing for Auckland, Graham Kristiffor, says the market for office space in the city remains extremely tight which is further pushing the incentive for new fit-outs.
“JLL’s latest Vertical Vacancy Review outlines extremely low vacancy rates and strong pre-leasing activity on space scheduled to come to market over the next two years,” says Kristiffor.
“This is a major driver behind the growing market for new fit-outs as businesses are increasingly seeing the value rather than the cost of providing quality office space for their staff, as they consider this a key factor in enhancing engagement, loyalty and productivity.”
In JLL’s latest Future of Work survey, many corporate real estate leaders ranked collaboration and flexibility as the two most desired outcomes in driving human experience in the workplace. To encourage such outcomes, more organisations are looking to build environments that encourage staff members to interact and work together. In this year’s guide, JLL compared the cost of three distinct fit-out styles:
• Traditional: featuring individual
offices balanced by workstations with limited
• Moderate: with minimal offices, greater spread of workstations and some collaboration space; and
• Progressive: a modern open floorplan without offices and a range of furniture to encourage flexibility and collaboration.
According to the guide, fitting out an office in line with contemporary work expectations can not only enhance morale and productivity, it requires less capital outlay, with the cost of a progressive fit-out 23 per cent cheaper than a traditional one. A significant portion of these savings can be attributed to simplified mechanical and electrical schemes.
The respective average square metre rates for office fit-outs in Auckland are US$1391 for traditional; US$1200 for moderate; and US$1117 for progressive. While these numbers place Auckland at 9th in terms of basic fit-out cost, it ranks joint third in the Asia-Pacific region for reinstatement costs, and third on its own for furniture affordability.
Nevertheless, Kristiffor says it’s important that organisations don’t see this global shift towards open, flexible co-working space as a cost-saving opportunity by scrimping on the non-structural fit-out elements.
“As work becomes a more social experience, we’re seeing the lines between residential and commercial environments become ever more blurred. Office furniture and even material selections can play a key role in motivating and retaining talent, therefore it’s important that companies are prepared to offset any potential savings in structural fit-out by investing in quality furniture that essentially make their staff feel at home at work.”
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