JLL: Building material prices remain high, with continuous climbing office renovation costs in the Asia-Pacific region.

Jones Lang LaSalle (JLL) latest release of the "2026 Asia Pacific Office Fit-Out Cost Guide" shows that, affected by the tariff-induced increase in metal building material prices, the fit-out cost of standard grade corporate offices in Hong Kong increased by 1.5% year-on-year to $200 per square foot, equivalent to approximately HK$1566 per square foot. The report points out that office fit-out costs in several cities in the Asia Pacific region continue to rise, primarily due to tight labor supply, high building material prices, and increasingly complex mechanical and technological systems. Andrew Yeung, head of project development services at Jones Lang LaSalle (JLL) Hong Kong, said: "Tariffs have raised the prices of steel and copper materials, leading to higher costs for core mechanical and electrical engineering, security and information technology, and audio-visual systems. However, with the slowing market trading, contractors are willing to lower their bidding prices in order to secure bids. Fierce market competition has offset some of the impact of the rise in building material prices on fit-out costs, resulting in only a 1.5% year-on-year increase." Looking ahead, Yeung expects that office fit-out costs will continue to face upward pressure in 2026. He said that geopolitical uncertainties have not yet been resolved, intensifying fluctuations in the metal market. Technology hardware such as video conferencing systems have also significantly increased in price this year. Additionally, as the Hong Kong office leasing market becomes more active, demand for office design and fit-out has increased, so contractors no longer need to rely on low bidding prices to win projects. Jones Lang LaSalle (JLL) stated that geopolitical uncertainty has once again become a major factor influencing cost risks. The ongoing conflicts in the Middle East continue to pose supply interruption risks, causing further turmoil in the global energy market, particularly affecting the Asia Pacific market, which is highly dependent on imported energy, petrochemical products, and high-energy-consuming building materials. Martin Hinge, Executive Director of Project Development at Jones Lang LaSalle (JLL) Asia Pacific, said: "Compared to other regions, the differences in fit-out costs in various markets in the Asia Pacific region remain significant. Markets such as Japan, Singapore, Australia, and New Zealand have high costs, reflecting local labor shortages and strict fit-out standards. India, mainland China, and some Southeast Asian markets still have cost advantages when calculated in US dollars, but this is often due to exchange rate fluctuations, rather than actual material cost reductions."