Bangkok February 2021

BUSINESS SUPPLEMENT
BANGKOK RANKS AS THE 7TH MOST AFFORDABLE
OFFICE MARKET TO FIT OUT IN ASIA PACIFIC
According to Asia Pacific Fit-Out
Cost Guide 2020/2021 by real estate
consultancy JLL, Tokyo ranks
as the most expensive office market
to fit out at USD1,927 per sqm for
the fourth consecutive year, compared
to the regional average of
USD1,001. Bangkok is the region’s
7th most affordable office market to
fit out at USD713 per sqm, 170%
less expensive than Tokyo and only
13.4% more expensive than the
lowest cost market for office fit-out
in Asia Pacific -- Ahmedabad, India
(USD617).
“Despite price competition
among construction service providers
and contractors, fit-out costs
in Bangkok have stayed relatively
stable. However, reinstatement
costs have increased due to rising
material costs in this traditionally
low margin segment,” says Stephen
Taylor, Managing Director of Project
& Development Services at JLL in
Thailand.
Many tenants are renewing
leases, downsizing and partially returning
leased space which requires
reinstatement work to be done outside
normal working hours, another
factor in higher reinstatement costs.
“We expect these trends to continue
into 2021,” Mr. Taylor adds.
Fitting out offices in most of key
office markets in Asia Pacific will
cost more in 2021
JLL’s report reveals that the average
fit-out cost rose 4.7% yearon-year
across the region, with labour
shortages, health and safety
considerations, material availability,
and higher delivery costs as the
main price drivers.
In 2021, organisations should
expect to pay more to redesign or
upgrade their workspaces even
while many are trying to decrease
capital expenditure (capex) due to
the financial impact of the pandemic,
says JLL.
Martin Hinge, Executive Managing
Director, Project Development
Services, JLL Asia Pacific, explains:
“Cities that rely heavily on foreign
labour have struggled with labour
shortages, and governments have
imposed stringent measures, including
enhanced inspection routines
and enforced health and safety
protocols, for construction sites
to reopen. These are important and
necessary precautions. However,
the impact on productivity and extended
project timelines are driving
costs up.”
Employers remain committed to
reimagine workspaces
Despite overall rising costs, JLL
believes this will not deter most
companies from investing in safe
and productive work environments
for their employees. The firm reveals
that while organisations may
be re-examining their real estate
footprint, workspaces still play an
integral role in preserving a company’s
corporate culture, as well as to
recruit and retain talent.
“Working practices have been
disrupted like never before and
many organisations are now reviewing
their portfolios to mitigate
the financial impact of the pandemic
on their business. As people start
returning to work, many are modifying
their offices to accommodate
de-densification measures and incorporating
more technologies to
facilitate both in-office collaboration
and remote working,” says Mr.
Hinge.
“Employee expectations, along
with the sudden change in working
habits, require companies to consider
how spaces can be used to boost
productivity and efficiency. In many
ways, employees have become
consumers of the work place and
make choices about where and how
they work, so I believe investing in
a flexible environment pays back in
terms of employee engagement,” he
adds.
Costs vary throughout region
Precipitated by the ongoing construction
boom and labour shortage,
Tokyo ranks as the most expensive
office market to fit out for the fourth
consecutive year. Price increments
are expected in Brisbane, Singapore,
Beijing, Shanghai, Guangzhou
and most Indian cities in 2021,
as constraints like access to labour,
reliance on imported materials and
delayed completion dates continue
to pose challenges.
Like Bangkok, Auckland, Manila,
Seoul and Taipei may see
fit-out costs stabilizing or even dipping
slightly, as many construction
service providers and contractors
have resorted to reducing overall
margins.
Mr. Hinge comments “Though
fit-out costs vary from market to
market around the region, we believe
the overall upward trend will
likely remain in 2021. Workplaces
will continue evolving, and there remains
a strong motivation for companies
to invest in areas such as
technology, health and wellness, to
meet increased expectations from
employees, as we all adjust to the
new normal.”
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