asia pacific fit-out cost guide - united kingdom/media/files/2017/project management/2016... ·...

ASIA PACIFICFIT-OUT COST GUIDE

Occupier Projects 2016/17 Edition

1CBRE PROJECT MANAGEMENT

FOREWORD

Martin WoodsSenior Managing Director, Asia Pacific CBRE Project ManagementGlobal Leadership & Platform

The evolution of the Asia Pacific Cost Guide into a more holistic guide was a natural progression from the “how much is it going to cost?” topic covered in 2014, to the “what solution will provide the best value?” focus point in 2015. To continue providing our clients with the best integrated service, in the 2016 edition we have addressed commercial office lifecycle costing through the modeling and regional comparisons of key common costs across capital expenses, operating expenses and leasing for Grade A buildings. Again, all the indices and tables provided are the result of analysis of empirical data from CBRE assignments covering the three major cost elements. As always, we are looking at ways to further improve this guide and provide you, the client, with the most relevant data to guide your real estate decisions so please let us have your feedback.

What is the holistic cost over the lifecycle of the corporate office?

CBRE TOKYO OFFICE

2 3ASIA PACIFIC FIT-OUT COST GUIDE CBRE PROJECT MANAGEMENT

CONTENTSINTRODUCTION 5

2016 APAC FIT-OUT COST INDEX 7

FIT-OUT COST BENCHMARKING TABLE 8

FIT-OUT COST TREND FROM 2014 TO 2016 11

LEASING 14

TYPICAL LEASE PERIOD 16

FACILITIES MANAGEMENT COST 18

NET PRESENT LIFECYCLE COSTING 22

ACTIVITY-BASED WORKING: FM COST CONSIDERATIONS 28

REGIONAL FIT-OUT COST ANALYSIS 30

2016 GLOBAL FIT-OUT COST INDEX 44

Disclaimer: CBRE Ltd has taken every care in the preparation of this document. The sources of information used are believed to be accurate and reliable, but no guarantee of accuracy or completeness can be given. The cost estimation are intended to be guides only. Please contact our market leaders, provided within this document or available from our cbre.com website, who can provide an accurate cost estimate based on your specific requirements. Neither CBRE, nor any director, representative or employee of CBRE company, accepts liability for any direct or consequential loss arising from the use of this document. The information and opinions contained in this document are subject to change without notice. No part or parts of this document may be stored in a retrieval system or reproduced or transmitted in reprographics, recording or otherwise, now known or to be devised without prior consent from CBRE.


MACRO-ECONOMIC FACTORS INTRODUCTION

As currencies in APAC generally continue to slide against the USD at rates at least equal to, or greater than, domestic inflation, a pattern of falling cost would appear when reported in USD in all locations except Hong Kong (see Cost Trend, page 11). The cost of construction in local currencies however are showing gradual increase and need to be considered against revenue generated in the local market when making commercial office investment decisions. Pipeline projects should be identified considering lease expiry and changes in headcount, as well as macro and micro economic factors.

Source: CBRE Asia Pacific Research Jun 2016

Driving Dramatic ShiftsCurrency Volatility Inflation

2015-2017

2013-2015

0%

-2%

-3%

-4%

-7%

-7%

-10%

-10%

-11%

-17%

-24%

-24%

-29%

-29%

0.0%

-6.2%

-6.4%

-3.6%

-4.3%

-2.6%

-4.5%

-2.7%

-6.5%

-0.8%

-11.1%

1.7%

-5%

-5.1%

3.81%

1.73%

1.00%

2.82%

0.44%

2.82%

5.94%

0.25%

0.49%

0.76%

2.66%

1.78%

2.02%

6.58%

2.30%

2.26%

1.47%

2.85%

1.25%

2.67%

5.37%

0.49%

1.29%

0.87%

2.74%

0.25%

2.01%

4.05%

Hong Kong

China

South Korea

Vietnam

Taiwan

Philippines

India

Singapore

Thailand

New Zealand

Malaysia

Japan

Australia

Indonesia

Lifecycle costing guides businesses to make the most informed decision for their Real Estate investment strategy

2014Fit-out Cost

2015Fit-out, Leasing& ABW options

2016Lifecycle Costing

Guide Assumptions

• The commercial tower is a Grade A office building within the Central Business District with the following characteristics:

- A modern, flexible, column-free footprint of at least 15,000 square feet

- Total floor area of at least 300,000 square feet - Sheltered parking GFA ratio of 1/2000 - Accessibility to public transport• Commercial office assumptions: - Office size between 25,000 to 30,000 square feet. - Density range of 1 workstation to 90 to 110 square feet - Fixed 1-1 desk ratio• Fit-out costs include: - Consultants fees - Builders works - M&E works - Standard office FF&E - Structured cabling • Exclusions: - Telephony/IT/AV/Security equipment - Consideration for building abnormalities or variances such as

onerous landlord requirements

Additional Guide Assumptions for FM Costs

• Facility Management costs include: - Cleaning - Mechanical & Electrical Maintenance - Security Services - Utilities - Pest control - Mailroom - Reception - Landscaping - Confidential waste disposal• Exclusions: - Dedicated Chiller and Generator maintenance - Property Tax - Management Fee

As part of CBRE’s commitment to delivering advantage for all of our clients, we are delighted to present the third installment of CBRE’s Asia Pacific Cost Guide. The 2016 edition provides industry professionals with a point of reference for capital costs, operational expenditure, and leasing costs to make more informed decisions on real estate strategy. CBRE has gathered data and solicited feedback from a cross-section of clients to derive information that will affect today’s commercial real estate decisions To further develop the APAC Fit-Out Cost Guide we have tried to take a broader view which has enabled us to assess the cost of the facility through to the end of its lifecycle. We have termed this Net Present Lifecycle Costing and used the data obtained to create a Net Present Lifecycle Cost Index.

Zac Zdravev Senior Director, Asia Pacific CBRE Project Management Global Leadership & Platform


HISTORIC FIT-OUT COST INDEX 2016 APAC FIT-OUT COST INDEX

2014 Cost Index

2015 Cost Index

Apart from some notable exceptions in inflation rates, foreign exchange volatility is still the main factor driving the dramatic shifts in the Asia Pacific Index. The index data is generated through the use of CBRE’s Project Management platform used for projects across Asia Pacific.

Despite the continued decline of JPY, award of the 2020 Tokyo Olympics buoyed the market and inspired confidence in the construction industry.

Riding the high demand for commodities from China, the AUD continued to perform well against the USD.

JPY hit a five-year low in June 2015.

AUD slide against the USD started in 2H 2014 & continued to drop until end of 2015.

1.27 1.20

1.18

1.17

1.12

1.06

1.04

1.00

0.98

0.98 0.96 0.95

0.86

0.83

0.82

0.82

0.78

0.77

0.62

0.56 0.52

Hong Kong

Seoul

Sydney

Tokyo

Perth

Auckland

Beijing

Shanghai

Melbourne

Singapore

Guangzhou Brisbane

Kuala Lumpur

Manila

Bangkok

Taipei

HCMC

Jakarta

Mumbai

Bangalore

Hyderabad

Disclaimer:This graph shows the capital expense multiplier for the design and construction of the same office project across Asia Pacific using Shanghai as the unit index. This index should be used as a guide only, for actual project budget estimates please contact the CBRE Project Management Division Lead in your city.

1.27 1.23

1.22

1.12

1.11

1.07

1.04 1.00

1.00 0.98

0.88

0.87

0.76

0.60

0.56 0.49

Tokyo Sydney

Seoul

Hong Kong

Singapore

Guangzhou

Beijing

Kuala Lumpur

Shanghai

Jakarta

Manila

Taipei

HCMC

Mumbai

Bangalore

Hyderabad

1.21 1.13

1.02

1.01

1.01

1.00

0.98 0.89

0.87 0.83 0.83

0.81

0.75

0.75

0.59 0.54

0.49

Seoul

Hong Kong

Beijing

Tokyo

Sydney

Shanghai

Guangzhou

Singapore

Kuala Lumpur Manila

Bangkok

Taipei

Jakarta

HCMC

Mumbai

Bangalore

Hyderabad

8 9ASIA PACIFIC FIT-OUT COST GUIDE CBRE PROJECT MANAGEMENT8 9ASIA PACIFIC FIT-OUT COST GUIDE CBRE PROJECT MANAGEMENT

FIT-OUT COST BENCHMARKING TABLE


FIT-OUT COST BENCHMARKING TABLE

Please note that the cost data only includes Consultancy fees, Builder Works, M&E works and Fixed Furniture and Equipment (FF&E) and should only serve as a guide reference across the region. This is not meant to be a budget document and CBRE Project Management Division Leads in each market should be approached to support on project specific budget estimates.

Typical reinstatement rates for offices may vary to different degrees depending on the reinstatement requirement.

BASIC MEDIUM HIGH

Region Country City US$/sq.ft US$/sq.ft US$/sq.ftReinstatement

US$/sq.ft

North AsiaSouth Korea Seoul 91 128 166 12

Japan Tokyo 84 126 168 44

Greater China

China

Beijing 75 105 156 13

Shanghai 71 100 152 12

Guangzhou 65 96 148 11

Taiwan Taipei 65 86 113 11

Hong Kong Hong Kong 84 125 200 23

PacificAustralia

Sydney 85 115 180 17

Melbourne 73 103 141 14

Perth 78 113 171 14

Brisbane 70 100 135 14

New Zealand Auckland 65 114 163 15

South East Asia

Philippines Manila 50 89 129 9

Vietnam HCMC 61 84 105 3

Indonesia Jakarta 57 81 110 5

Malaysia Kuala Lumpur 64 87 125 14

Singapore Singapore 80 109 127 14

Thailand Bangkok 46 84 134 10

South Asia India

Mumbai 47 66 85 2

Hyderabad/Kolkata/Pune 40 55 70 2

Bangalore/Chennai/Delhi 43 60 78 2

Various cost trends have formed following the analysis of empirical data gathered from completed projects managed by CBRE. Inflation, currency volatility and unique in-location market conditions each had a different degree of impact on the fit-out rates.

Royston TohSenior Manager, Asia PacificCBRE Project ManagementGlobal Leadership & Platform

FIT-OUT COST TREND FROM 2014 TO 2016

2014 2015 2016

40

60

80

100

120

140

160

North Asia Greater China South AsiaSouth East AsiaPacific

Seou

l

Toky

o

Beijin

g

Shan

ghai

Guang

zhou

Taipe

i

Hong

Kong

Sydn

ey

Melbou

rne

Perth

Brisb

ane

Auck

land

Manila

Jaka

rta

Kuala

Lum

pur

Singa

pore

Bang

kok

HCMC

Mumba

i

Hyder

abad

Bang

alore

In Pacific, why the rebound in cost per square foot in 2016?1. Smaller leasing deals resulting in density changes and increasing services costs by unit of area. 2. Old stock - buildings requiring more CAPEX to perform the way the fit-outs require.

JESS SURMANDirector, CBRE Project Management

Perth, Western Australia

The graph below represents a blended average for each location.


PROJECT STANDARD

Description of items Basic Medium High

BASIC OFFICE FUNCTIONALITY

Elaborate Pantry and Breakout Areas

Basic Pantry fit-out

Very open office layout

M&E Redundancy N N+1 2N

MEETING ROOMS

Integrated A/V and lighting control

Basic A/V

Projector & Audio/Telephone

Tables and Chairs only

SECURITY

Min. 3 levels of security

1 level of security

No electronic security

WALL & PARTITIONS

Plasterboard with fabric finish / to slab with high acoustic rating)

Double glazed partition

Single glazed partition

Plasterboard walls

FLOOR FINISHES

Marble/Stone Slab Finishes

Carpet Tile

Vinyl Sheets or basic concrete screed finishes

PROJECT STANDARD

Description of items Basic Medium High

SYSTEM FURNITURE

Flexibility in Workspace Churn & Expansion

Powerhoop as an Uninterrupted Footprint Division

Resolved Design & Seamless Connectivity

Simplicity with reduced kit-of-parts

Unified look and combined usage

Cable trough and various cable outlet application

TASK CHAIRS

Asymmetrical lumbar support system

Pelvic support

4-D arms and seat pan adjustments

Upright back lock

Supportive Mesh with tension zones

Synchronized tilt mechanism

Supportive Mesh with optional upholstery back

PROJECT STANDARD MATRIX


LEASING

While headline rental rates remain a critical component for any office user, we are witnessing an increased emphasis placed on a more holistic understanding of occupancy factors including how location, fit-out, FM cost and workplace program can support and drive corporate objectives.

Manish Kashyap Regional Managing Director, Asia Pacific Brokerage

Leasing wheel – Prime Rent

Leasing wheel – Grade A

257

174

148

118

106

92

81 78

71 62 62 59 57 47

45 39 39 35

33 31 31

Hong Kong Beijing

Tokyo

Shanghai

Delhi

Singapore

Mumbai

Sydney

Seoul

HCMC Jakarta Guangzhou

Taipei

Brisbane

Perth

Gurgaon

Melbourne

Auckland

Bangalore

Bangkok

Manila

117 116

99

85

85

70

63

53 43

42 41 40 39 39

38 35 30 29 27 27

24 20

11

Beijing Tokyo

Hong Kong

Singapore

Shanghai

Delhi

Mumbai

Seoul

Brisbane

Taipei

Jakarta HCMC Perth

Guangzhou

Sydney

Melbourne

Bangkok

Auckland

Gurgaon

Bangalore

Manila

Kuala Lumpur

Hyderabad

CBRE ORLANDO OFFICE

The graph below provides the leasing costs per sq ft in USD for Prime and Grade A building in each market.


TYPICAL LEASE PERIOD

The Asia Pacific geographical map represents the typical lease period by location. The periods are further categorized into 3 main groups namely 3-year lease, 5 to 6-year lease and 8 to 9-year lease. Each period must be carefully considered by corporate clients when they are deciding to enter a new market, looking for a new lease space or renewing their existing lease terms.

3 YEARS LEASE 5-6 YEARS LEASE 8-9 YEARS LEASE

BEIJINGSHANGHAIGUANGZHOUHONG KONG

SEOULTOKYOTAIPEIHYDERABAD

MELBOURNEAUCKLAND

MANILASINGAPOREPERTHBRISBANEMUMBAI

HCMCJAKARTAKUALA LUMPURBANGKOK

NEW DELHIBANGALORECHENNAISYDNEY

Markets such as the Pacific region tend to have longer lease terms whereas most markets in Asia have terms ranging from 3 to 5 years. This is primarily due to greater market volatility in Asia with landlords taking

advantage of rental cycles. More recently there has been a trend for occupiers to secure longer lease periods, especially for larger build-to-suit or special use facilities where lease terms of 5 to 9 years can be achieved.

TOKYO

MUMBAI

SINGAPORE

NEW DELHI

BANGALORE

CHENNAI

HYDERABAD

HCMC

PERTH

BANGKOK

JAKARTA

KUALA LUMPUR

SEOUL

MANILA

SYDNEY

BRISBANE

MELBOURNE

SHANGHAI

BEIJING

GUANGZHOU

HONG KONG

AUCKLAND

TAIPEI

18 19ASIA PACIFIC FIT-OUT COST GUIDE CBRE PROJECT MANAGEMENT18 19ASIA PACIFIC FIT-OUT COST GUIDE CBRE PROJECT MANAGEMENT

FACILITIES MANAGEMENT COST

CBRE MADRID OFFICE


FACILITIES MANAGEMENT COST

Key Components

CLEANING SECURITY SERVICES

CONFIDENTIAL WASTE MECHANICAL & ELECTRICAL MAINTENANCE

PESTS CONTROL

UTILITIES

LANDSCAPING MAILROOM RECEPTION

The operating cost of a corporate office is defined as the Facilities Management (FM) cost in this document. The FM cost shall be

FM Industry professionals would concur that benchmarking spend across markets and industries is a challenging exercise due to the numerous variables included within the spend categories. However, what it does allow us to do is to identify anomalies and question further the operating expenses we manage.

Cameron Ahrens Executive Director, Asia Pacific CBRE Enterprise Facilities Management

The graph below indicates the unit rates per sqft in USD for various components annually. Rates in different locations are directly affected by the labor market condition and local tariff rates.

classified into 9 key components namely, cleaning, M&E maintenance, pest control, security services, utilities, mailroom, confidential

waste, landscaping and reception. Depending on the facility, the cost may differ on the final service standard adopted by the client.

Guide Assumptions for FM cost

• The commercial tower is a Grade A office building within the Central Business District with the following characteristics:

- A modern, flexible, column-free footprint of at least 15,000 square feet

- Total floor area of at least 300,000 square feet • Commercial office assumptions: - Office size between 25,000 to 30,000 square feet. - Density range of 1 workstation to 90 to 110 square feet - Fixed 1-1 desk ratio

• Facility Management costs include: - Cleaning - Mechanical & Electrical Maintenance - Security Services - Utilities - Pest control - Mailroom - Reception - Landscaping - Confidential waste disposal

• Exclusions: - Dedicated Chiller and generator maintenance - Property Tax - Management fee

CLEANING SECURITY SERVICES PESTS CONTROL LANDSCAPING

RECEPTION CONFIDENTIAL WASTEMAILROOM M&E UTILITIES

11..3344

11..6622

11..2255

22..1111

11..2211

11..1122

11..0088

11..2255

11..3311

11..3355

11..1111

11..0077

00..9966

11..5555

00..8877

11..1133

00..9922

00..8866

00..7788

00..7722

00..9911

11..0055

00..8844

00..5588

00..8811

00..7755

00..7733

00..8888

00..3399

00..3399

00..8877

00..8833

00..7755

11..1111

00..3311

00..4400

00..4400

00..4455

00..4411

00..3388

11..6622

11..4488

11..5555

11..6622

11..4444

11..5555

11..5555

11..6622

11..3333

11..3300

00..9977

11..0044

11..0044

00..8866

00..8866

00..8866

00..8866

00..6655

00..6655

00..6688

11..8800

11..6644

11..7722

11..8800

11..6600

11..7722

11..7722

11..8800

11..4488

11..4444

11..0088

11..1166

11..1166

00..9966

00..9966

00..9966

00..9966

00..7722

00..7722

00..7766

22..2255

22..0033

22..0099

11..9922

22..0022

11..8877

11..8800

11..4455

11..6644

22..0077

11..8877

11..7799

11..6622

11..4400

11..9922

00..5511

00..6666

00..7755

00..6699

00..6633

11..6611

11..2233

11..5500

00..8844

11..4455

11..3344

11..2299

00..9988

11..4499

00..8899

11..4455

11..3399

11..2255

00..8800

11..3300

00..8888

00..7766

00..8855

00..7788

00..7722 0.00 1.00 2.00 3.00 4.00 5.00 6.00 7.00 8.00 9.00 10.00

Sydney

Singapore

Perth

Tokyo

Auckland

Melbourne

Brisbane

Seoul

Hong Kong

Taipei

Beijing

Shanghai

Guangzhou

Jakarta

Kuala Lumpur

Bangkok

Manila

Mumbai

Bangalore

Hyderabad

99..7755

99..2266

99..1177

99..0077

88..7744

77..5566

66..8877

66..3388

44..1133

33..9977

44..3399

44..6677

44..8866

66..9966

77..4488

77..6622

77..8811

88..1166

88..3355

88..5555


NET PRESENT LIFECYCLE COSTING


CBRE TOKYO OFFICE



Assumptions: Grade A office building and defined as the gross lease cost. Medium standard office fit-out construction rates. FM cost will be adopting the CBRE Research y-o-y inflation rates and the discount rate for NP analysis is 10%.

The below graph indicates the NPLCC proportion percentage between the 4 main cost components of the corporate real estate.

Corporate Real Estate needs to take into account the total cost of an asset when presenting the cost/benefit analysis to the business for real estate decisions. CBRE has provided a holistic cost guide as well as Workplace solutions to support corporate objectives.

The CBRE termed Net Present Lifecycle Costing (NPLCC) is an index that assumes a typical 5 year investment time frame and not necessarily the lease period. NPLCC is a guide that benchmarks potential capital and operating expenses across the region over the investment period brought forward to present value. NPLCC provides holistic cost data to clients, enabling informed decisions and guides real estate strategies.

Nick LeeRegional Director, Asia PacificCBRE Project ManagementGlobal Leadership & Platform

FIT-OUT COST LEASING COST FM COST REINSTATEMENT NPLCC

(USD/Sqft)

673

635

588

511

495

392

372

351

327

325

325

301

297

295

286

282

237

216

207

193

193

121 $55

$60

$60

$87

$89

$84

$114

$81

$103

$96

$86

$100

$113

$115

$66

$60

$128

$100

$109

$125

$105

$126

$46

$113

$113

$83

$100

$125

$121

$171

$146

$163

$175

$179

$163

$158

$263

$292

$221

$354

$354

$413

$488

$484

$18

$19

$19

$28

$20

$21

$37

$31

$37

$30

$32

$36

$40

$42

$20

$19

$35

$32

$39

$34

$33

$38

$0 $100 $200 $300 $400 $500 $600 $700

Hyderabad

Gurgaon

Bangalore

Kuala Lumpur

Manila

Bangkok

Auckland

Jakarta

Melbourne

Guangzhou

Taipei

Brisbane

Perth

Sydney

Mumbai

Delhi

Seoul

Shanghai

Singapore

Hong Kong

Beijing

Tokyo

46% 31% 31%

41% 36% 40% 28%

42% 35% 32% 29%

35% 35% 31% 19% 16%

33% 20% 21% 21% 17% 19%

38% 58% 58%

46% 53% 43% 60%

40% 49% 55% 58% 50% 48% 55% 75% 78%

56% 72% 69% 70% 77% 72%

15% 10% 10% 9% 9% 13% 11% 13% 13% 10% 11% 12% 13% 11%

6% 5% 9% 7% 8% 6% 5% 6%

Hyder

abad

Gurgaon

Bangalore

Manila

Bangkok

Auckl

and

Jaka

rta

Kuala

Lum

pur

Mel

bourn

e

Guangzh

ou

Taip

ei

Perth

Sydney

Brisbane

Mum

bai

Delhi

Seou

l

Shanghai

Singapor

e

Hong K

ong

Beijin

g

Toky

o

FIT-OUT COST LEASING COST FM COST REINSTATEMENT


1.361.28

1.19

1.03

1.00

0.79

0.75

0.71

0.66

0.66 0.66 0.61 0.60

0.60 0.58

0.57

0.48

0.44

0.42 0.39

0.39 0.24

Tokyo Beijing

Hong Kong

Singapore

Shanghai

Seoul

Delhi

Mumbai

Brisbane

Sydney

Perth

Taipei Guangzhou

Melbourne

Jakarta

Auckland

Bangkok

Manila

Kuala Lumpur

Bangalore

Gurgaon

Hyderabad

Through collaboration and extensive data mining from our integrated services, CBRE is able to provide our clients a concise index and representation of the major cost considerations for their commercial office investment. The NPLCC provides clients with the advantage of understanding the full cost over the total lease period. This together with the labour analytics can help develop real estate strategies that support corporate objectives.

Royston TohSenior Manager, Asia PacificCBRE Project ManagementGlobal Leadership & Platform


CBRE BALTIMORE OFFICE


ACTIVITY-BASED WORKING

FM COST CONSIDERATIONS

Change Management Continue change management and communication support until desired changes are fully incorporated in attitudes, behaviors and culture.

Real-time Occupancy

Management Real-time information on how space is being utilized, space loading monitoring so as to activate reactive/proactive RE and FM actions.

IT Cost IT Function needs to be more pro-active in managing maintenance and ensuring that the platform that supports mobility (hardware, bandwidth availability, software) is always operating at an optimum level.

Upgraded FM support More frequent cleaning of surfaces and devices (keyboards and phones as they are shared), digitization support.

Workplace Manager / Concierge

Services Re-shaping FM services to include concierge function. Expansion of roles to being an ambassador for the new work practices, answer questions about how the new workplace operates and taking a more proactive role in ensuring that everything works.

Booking system Advanced check-in system to monitor utilization for meeting rooms and workstations.


REGIONAL FIT-OUT COST ANALYSIS



JAPAN COST ANALYSIS – TOKYO TAIWAN COST ANALYSIS – TAIPEI

SOUTH KOREA COST ANALYSIS – SEOUL HONG KONG COST ANALYSIS

TOKYO Tokyo continues to see strong demand from companies looking to expand their footprint or upgrade to better buildings. However, some tenants began to delay decisions ahead of the large volume of supply due for completion from 2018 onwards. Landlords of buildings that have been less successful in letting space started to offer more flexible terms.

TAIPEIOffice investment volume surged mainly driven by solid activity from owner-occupiers. Despite the surge in total investment turnover, the number of transactions remained low, reflecting the ongoing lack of investable office assets. On the other hand, owners-occupiers continue to benefit from low interest rates after the Central Bank cut policy rates.

SEOULDemand from the co-working sector is steadily rising. More firms are considering implementing workplace strategy, partly from a cost saving and space efficiency angle. A number of firms have already implemented measures such as hot desking and smart offices.

HONG KONGServiced office and co-working space providers continued to register solid demand for space. Decentralisation activity is expected to increase as secondary space and new supply in areas such as Kowloon East provides options for occupiers currently in expensive submarkets.

Hisanao KajiuraSenior DirectorTokyo Project Management+81 3 [email protected]

Bruce LeeSenior Director South Korea Project Management+822 21705870

[email protected]

Basic Medium High

15% 12% 8%

45%

25%

15%

45%

23%

20%

40%

32%

20%

US$91

US$128

US$166 FurnitureM&E WorksBuilder WorksSoft Cost

seoul

mumbai

James HoSenior DirectorTaiwan Project Management+886 2 77069538

[email protected]

Steve PalfreySenior Director Hong Kong Project Management+852 28202996

[email protected]

Basic Medium High

13% 10% 8%

34%

38%

15%

33%

38%

19%

35%

36%

21%

US$84

US$125

US$200FurnitureM&E WorksBuilder WorksSoft Cost

Basic Medium High

9% 8% 7%

43%

29%

19%

44%

29%

19%

44%

30%

19%

US$65

US$86


Basic Medium High

13% 10% 8%

34%

37%

16%

33%

39%

18%

36%

39%

17%

US$84

US$126


Tokyo

shanghai


Basic Medium High

18% 13% 10%

28%

34%

20%

29%

37%

21%

31%

40%

19%

US$75

US$105


beijing

hyderabad/kolkata/pune

CHINA COST ANALYSIS – BEIJING/GUANGZHOU

CHINA COST ANALYSIS – SHANGHAI

BEIJINGBeijing saw stronger demand from domestic companies but the general focus among multinationals continued to be on cost saving or renewals. The period saw some surrender leases and relocations to cheaper areas.

Catherine XiongSenior DirectorChina Project Management+86 10 [email protected]

FurnitureM&E WorksBuilder WorksSoft Cost

guangzhou

new delhi/bangalore/chennai

Basic Medium High

18% 11% 10%

33%

36%

13%

33%

37%

19%

34%

37%

19%

US$65

US$96

US$148

GUANGZHOU

SHANGHAIShanghai enjoyed a positive quarter as market sentiment remained positive. Solid leasing demand was recorded across a wide range of sectors but occupiers took longer to make decisions due to the introduction of the new VAT.

Bahtiyar TaySenior DirectorChina Project Management+86 21 24011403

bahtiyar.tay@ cbre.com.cn

shanghai

shanghai

Basic Medium High

17% 14% 10%

28%

35%

20%

28%

38%

20%

29%

41%

20%

US$71

US$100


mailto:?subject=


INDIA COST ANALYSIS – MUMBAI/ HYDERABAD/PUNE/KOLKATA

INDIA COST ANALYSIS – NEW DELHI/ BANGALORE/CHENNAI

MUMBAICo-working space is gaining traction, with several new openings in Bangalore and Mumbai in recent quarters. Most providers are domestic operators focusing on catering to start-ups. Among domestic firms, particularly those in the financial services sector, there is still a strong focus on acquiring properties for self-use,especially in Mumbai.

HYDERABAD/ KOLKATA/ PUNERecent quarters have seen stronger leasing activity in Hyderabad which offers lower rents and isemerging as an alternative to Bangalore. The city was the country’s original IT hub and is returning to prominence after an end to several years of political instability.

Gurjot BhatiaManaging Director India Project Management+91 1142490200

[email protected]

mumbai

mumbai

Basic Medium High

14% 13% 11%

28%

42%

16%

29%

44%

14%

30%

44%

15%

US$47

US$66




Basic Medium High

20% 19% 18%28%

40%

12%

28%

40%

13%

28%

41%

13%

US$40

US$55




Basic Medium High

17% 14% 12%

28%

42%

13%

29%

43%

14%

30%

44%

14%

US$43

US$60


NEW DELHI/ BANGALORE/ CHENNAINew Delhi is still registering solid demand for front office space, activities mainly focus onGurgaon, where IT companies are particularly active. Many companies in Bangalore have capped their growth as city centre rents are quite high.


SOUTH EAST ASIA COST ANALYSIS – SINGAPORE/KUALA LUMPUR

SOUTH EAST ASIA COST ANALYSIS – VIETNAM/BANGKOK

SINGAPOREProviders of co-working space are emerging as a new driver of demand. Recent quarters have seen several major operators pre-commit to new space. Traditional serviced office providers are responding by offering similar product. Landlords are responding to weak demand by being creative to retain tenants such as by providing a capital contribution towards fit-out costs and other incentives.

HCMCThe unchanged supply in office space allowed HCMC office market to absorb the remaining space in both Grade A and B. However, by the end of 2016, there will be a new wave of supply in decentralized area, expecting the market to change in both rent and vacancy rate.

BANGKOK The current market condition of low vacancy rates and rising rents is expected to continue due to the limited future supply with reasonable level of demand in the next few years. However, after 2018, the market condition could change if all the planned office developments (1 million sq. m.) were to start at the same time.

HANOILarge-scale office buildings are being actively fitted out for launch, which will add up both grade A and B stocks. This is expected to put downward pressure on rents.

singapore


Basic Medium High

10% 7% 6%34%

40%

16%

33%

40%

20%

36%

38%

20%

US$80

US$109

US$127

Basic Medium High

11% 9% 7%

32%

40%

17%

31%

38%

22%

32%

38%

23%

US$64

US$87

US$125

KL


KUALA LUMPURThe coming few years will continue to be a tenants’ market with more quality office space available in the market and owners/investors may experience stiff competition in retaining existing tenants or leasing out new space. Prime rentals are expected stay stable, but may see a dip in occupancy rates with the increase competitiveness.

Basic Medium High

10% 8% 7%

30%

38%

22%

27%

37%

28%

27%

35%

31%

US$61

US$84


Garth ChapmanSenior DirectorSEA Project Management+65 62291114

[email protected]

Basic Medium High

12% 8% 6%

35%

38%

15%

36%

39%

17%

39%

39%

16%

US$46

US$84



SOUTH EAST ASIA COST ANALYSIS – JAKARTA/MANILA

PACIFIC COST ANALYSIS – SYDNEY/MELBOURNE

JAKARTAWith the ongoing influx of new office buildings for the next 1-2 years and given that for the past 1 year, the total amount of demand has been vastly superseded by the total amount of supply, occupancies and rental rates will have further adjustments. Occupancy rates of CBD office in Q2 is still on the downhill trend due to limited demand with strong supply situation.

MANILABuildings slated for turnover in the next 2 years continue to be traded at fast rates as more companies, both business process outsourcing (BPO) and non-BPO, help build up this quarter’s tenant representation sales.

PACIFICLandlords are reviewing how they interact with tenants as they seek to become more customer-centric. One popular measure has been to introduce simplified and shorter-form leases. Occupiers are pushing landlords to install high quality end-of-trip facilities for employees. There is demand for co-working space but some concern over the longevity of this sector.

MELBOURNEBoth enquiry levels and the volume of leasing transactions recorded a steady increase in Melbourne. Technology firms were noticeably more active this quarter.

SYDNEYSydney enjoyed solid leasing activity supported by strong white collar employment growth. Financial, business services and education & training firms were especially busy.

Basic Medium High

12% 10% 8%

32%

38%

18%

32%

37%

21%

33%

36%

23%

US$57

US$81

US$110

jakarta


manila

Basic Medium High12% 8% 6%

35%

38%

15%

36%

39%

17%

39%

39%

16%

US$50

US$89


Ian ReaManaging DirectorPacific Project Management+61 2 9333 9102

[email protected]

Basic Medium High

16% 13% 10%

32%

37%

15%

31%

37%

19%

34%

37%

19%

US$85

US$115


Garth ChapmanSenior DirectorSEA Project Management+65 62291114

[email protected]


Basic Medium High

18% 12% 10%

33%

35%

14%

33%

37%

18%

35%

36%

19%

US$73

US$103

US$141


PACIFIC COST ANALYSIS – BRISBANE/PERTH PACIFIC COST ANALYSIS – AUCKLANDAUCKLAND

Ian ReaManaging DirectorPacific Project Management+61 2 9333 9102

[email protected]


Basic Medium High

16% 12% 11%

33%

37%

14%

32%

36%

20%

32%

36%

21%

US$70

US$100

US$135


Basic Medium High

17% 16% 13%

32%

34%

17%

31%

35%

18%

33%

35%

19%

US$78

US$113

US$171


Basic Medium High

23% 20% 17%

40%

27%

10%

38%

30%

12%

36%

32%

15%

US$65

US$114

US$163

BRISBANEBrisbane continued to see a certain degree of uncertainty but the worst appears to be over. Leaseexpiries are driving deals. More companies are taking smaller spaces and/or moving to a flexibleworking environment.

PERTHIn Perth the period saw flight to quality across all sectors driven by expiring leases. Occupiers in thismarket are taking advantage of landlords’ weakness to secure attractive deals.


2016 GLOBAL FIT-OUT COST INDEX

The 2016 edition cost guide included the global cost index to benchmark similar projects in key markets across the globe. For more detailed breakdown by cities within the region, please refer to the respective regional cost guides.

CBRE hope that this can guide corporate clients to review the cost globally but would appreciate that a CBRE professional is engaged in-location to support in producing a more specific budget estimate for any form of budgetary approval

purposes. The index wheel should not be replicated or adopted for other documentation without direct consultation with CBRE.

1.25

1.20

1.11

1.02

1.00 0.92

0.91

0.84

0.55

New York City

Frankfurt

Hong Kong

Sydney

London Los Angeles

Mexico City

Sao Paulo

Bangalore

KEY CONTACTSCBRE CONTACTS

Martin WoodsSenior Managing Director,CBRE Project Management, Asia Pacific+852 2820 [email protected]

Zac Zdravev Senior DirectorCBRE Project Management, Asia Pacific+65 6326 [email protected]

Nick LeeRegional DirectorCBRE Project Management, Asia Pacific+852 2820 [email protected]

Cameron AhrensExecutive DirectorCBRE Enterprise Facilities Management, Asia Pacific+65 6229 [email protected]

Peter Andrew Regional DirectorCBRE Workplace Strategies, Asia Pacific+65 6326 [email protected]

Rohini Saluja Executive Director, Asia PacificCBRE Advisory & Transaction+65 6326 [email protected]

ACKNOWLEDGEMENTS

Royston Toh Senior ManagerCBRE Project Management, Asia Pacific+65 6229 [email protected]

Brendan BruceManaging DirectorHaworth, South East Asia

© 2016 CBRE Group, Inc. All Rights Reserved. CBRE has taken every care in the preparation of this report. The sources of information used are believed to be accurate and reliable, but no guarantee accuracy or completeness can be given. Neither CBRE, nor any CBRE company, nor any director, representative or employee of CBRE company, accepts liability for any direct or consequential loss arising from the use of this document or its content. The information and opinions contained in this report are subject to change without notice.

No part or parts of this report may be stored in a retrieval system or reproduced or transmitted in any form or by any means electronic, mechanical, reprographics, recording or otherwise, now known or to be devised without prior consent from CBRE. Agency Licence No.: L3002163I.

www.cbre.com

asia pacific fit-out cost guide - united kingdom/media/files/2017/project management/2016... ·...

Documents