Office fit out planning
Office fit out costs are in the details. Image: Canva
  • Brisbane is almost on par with Perth, an average of $2 more expensive per square metre
  • Office fit out costs are greatly determined by style and specification
  • 43% of the total office fit out cost tends to be building work expenses

Office fit-out costs are gathering momentum, as prices rose 14.84% year on year, according to JLL.

Nationally, the average fit-out cost is $2,662 per square metre, with Sydney pipping Canberra to the top at $2,765. West is best, with Perth taking out the title of most affordable, beating Brisbane by a mere $2 per square metre.

  1. Sydney, $2,765 per sqm
  2. Canberra, $2,761 per sqm
  3. Adelaide, $2,703 per sqm
  4. Melbourne, $2,676 per sqm
  5. Brisbane, $2,554 per sqm
  6. Perth, $2,552 per sqm

Across the country, average prices ranged from $1,997 per square metre for a base specification open floor plan with no enclosed offices, to $4,624 per square metre for a high specification traditional office. Builders’ labour accounts for the highest proportion (43%) of fit-out costs, while mechanical and electrical work remain the second largest component of costs (26%).

Fit out cost per city by style per square metre

City

Progressive ($) Moderate ($) Traditional ($)

Adelaide

2,701 2,900 3,361

Brisbane

2,553 2,741 3,176

Canberra

2,760 2,963

3,434

Melbourne 2,675 2,872

3,328

Perth 2,522 2,708

3,138

Sydney 2,764 2,968

3,439

Source: JLL Australia Fit-Out Costs Guide 2022/2023.

“While there is no one-size-fits-all answer to how much an office fit-out will cost, factors to be considered when planning a new fit out or renovation are location, size of the tenancy, complexity of the design, IT/AV requirements, acoustics, material selections and long lead times that affect program and sustainable selections which may have larger capital cost but lower operational costs,” said JLL’s State Manager, Project and Development Services, Nichola Hodge.

Inflation and disruption drive prices up

It comes as no surprise that two of the major factors pushing the cost of office fit-outs up is inflation and supply chain disruptions.

Regarding the latter, this includes a shortage of shipping containers, adding time and cost to moving materials around the world, according to JLL.

Extreme weather has also played a part, the report said production of paint, glass, timber, laminates, joinery, and steel were affected.

As cities emerged from the Covid storm, it was clear that Western Australia’s capital did well to keep many of the associated issues at bay.

“Perth fared well during the pandemic experiencing positive internal migration, along with Construction classified as ‘essential workers’ which enabled the industry to keep up with demand.”

Nichola Hodge, JLL State Manager, Project and Development Services

“However, the availability of skilled and semi-skilled labour continues to be a challenge and the shortage of skills is driving up labour costs. The international recruitment and re-training initiatives by the West Australian Government will hopefully help to backfill the shortfall in the mid-term,” said Hodge.

The cost of a traditional fit out style

In terms of office fit-out, there are three distinct styles, including progressive, moderate, and traditional. A style is typically picked based on the requirements of the business, but the price can be a factor in determining which style is chosen.

A progressive style refers to an open floor plan with no enclosed office areas. This style aims for a 60/40 floor space balance. A majority of the total floor space will be dedicated to traditional benching and desk space. The remaining 40% of floor space is allocated as meeting rooms and larger collaboration working zones.

A moderate style is largely open plan, with 10% enclosed offices. Traditional methods of working cover 70% of the floor area, with the remainder comprising meeting rooms and agile or collaborative work areas.

A traditional style refers to an office design that uses circa 30% of the floor space as enclosed offices.

Fit out cost by style and specification per square metre

Style

Base Specification Medium Specification High Specification

Progressive

$1,997 $2,662 $3,727
Moderate $2,144 $2,858

$4,001

Traditional $2,477 $3,303

$4,624

Source: JLL Australia Fit-Out Costs Guide 2022/2023.

An evolving client wishlist

Post-pandemic, a significant shift in working styles and habits are driving change in the office sector.

“The way people behave in the workplace, how our clients view their offices, and how buildings are used are all changing quickly,” said JLL Work Dynamics Lead – WA, Adam Edmunds.

“We have witnessed ongoing technological investment to promote the rapid adoption of flexible and dynamic working.

“As our clients invest in programmes to foster collaboration, entice and retain talent, and improve physical and mental health and wellness, these trends reflect a reimagining of the function of the workplace.

“Goals for environmental sustainability are also strengthened by investments in high-quality space,” added Edmunds.

The report also noted that over 90% of leaders across the region believe office fit-out costs will continue to remain expensive this year, however, prices are expected to moderate towards the end of 2023, according to JLL Managing Director Scott McCrossin.



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