According to the JLL Asia – Pacific Planning Cost Guide 2021/2022, the average cost of designing and building an office workplace in Hong Kong has been replaced by 9% year-on-year and returned to pre – covid – 19 levels.
The city’s average office equipment cost has risen to $ 120 per square foot (HKD 935) this year after about 8% in 2020, leading to increased confidence, increased business, and, as a result, higher costs of construction.
The study finds that development costs vary by market, from $ 177 per square foot in Tokyo, the most expensive market in the Asia Pacific region, to $ 62 per square foot in Ahmedabad, India. The cost of opening offices in Hong Kong, like last year, is the ninth most expensive in the Asia-Pacific region.
Ryan Wong, Project and Development Services Manager at JLL in Hong Kong, said: “The market has returned to normal as the pandemic has eased and companies’ confidence in business prospects has declined. As a result, the sharp rise in prices of Metallic commodities could drive construction contractors’ prices almost to the level of costs for mechanical and electrical trade (M&E) and IT infrastructure.
“Benchmark wages are projected to rise more than in previous years, and a revision of workers’ wages expected in 2022 could lead to higher labor costs. The limit on power in factories over mainland China has an impact on costs. therefore we believe that the cost of equipment will continue to increase in the next year, “he said.
According to the report, the average cost of designing and building jobs in the Asia Pacific has increased by 10.8% year on year, and the average planning cost per square foot is now $ 103.
The factors driving price increases in most markets are due to the direct impact of the pandemic, such as supply chain disruption, labor shortages, material availability, and rising raw material costs.
Martin Hinge, executive director-general of project development services at JLL Asia-Pacific, said, “As the region struggles to reopen, we are seeing significant price increases for office equipment, especially in cities that are heavily dependent on foreign labor. . and imported materials.
Over the next 12 months, JLL predicts that opening an office will likely be more expensive, especially in some markets in China, India, and Southeast Asia.
“Given the continuing constraints on labor and the need to seek out potentially more expensive alternatives, there is still a strong likelihood that price increases will continue across the region,” said Hinge. “However, there are signs of green shoots as vaccination rates rise and travel across the region begins. This may alleviate labor and skill shortages in some markets.”
Sustainability will shape the future of office design
Despite rising costs, office expansion will continue to be high on the agenda of many companies over the next year. According to the report, the top three areas reserved by business leaders for further investment in 2022 are audiovisual technology and tools, mechanical and electrical installations such as sensors and filters, and sustainability features such as roof gardens, greening, roof, and water. Storage.
Hinge said: “A sustainable and responsible office building creates initial added value for companies. Not only can you reduce operating costs by improving energy efficiency, but you can create a more productive and supportive work environment to attract talent into the battle for talent. “
“As the office becomes a place for collaboration and brainstorming, companies are embarking on the hybrid business journey by creating transparent virtual and physical experiences for their employees. Office to improve the overall employee experience” Hinge said.