Turner & Townsend calculates that London is now the second most expensive office fit-out market in the world, coming in just behind New York.
Its analysis of 58 cities put London’s high-spec fit-out costs at US$5,872 per sq m, a whisper below New York’s $5,886 per sq m.
Other UK cities are in a different league altogether.
Edinburgh and Glasgow shared joint 21st place at $3,859 per sq m.
Birmingham came 22nd with $3,857 per sq m, and Manchester was 25th with $3,666 per sq m.
The consultant said London’s post-pandemic stagnation has ended, but the result is less new stock available until the 2030s, leading to an increase in major fit-outs.
This is particularly the case in Canary Wharf, where wholesale retrofits and refits are underway at several skyscrapers.
Financial and professional services clients are the top spenders.
Entice them out of their homes
Turner & Townsend notes increased demand for higher-quality, more sustainable workspaces with eye-catching amenities.
In the age of flexible working, businesses are working harder to entice employees to come together.
The company said an office now needs to be more than just a place to work: it must be a home from home, a place to eat, drink and socialise.
Also adding cost is AI-driven climate control and lighting.
Nadia de Klerk, global sector sponsor and head of UK occupier & portfolios at Turner & Townsend, said we may be looking at covid in the rearview mirror, but its impact on business endures.
“Occupiers, from major global players in financial, professional and legal services to tech behemoths and startups, are all competing in an international market for talent and investment,” she said.
“They must have top-quality office space which reflects their brand and ambition – but stock is running short.”
