A new report from Knight Frank has found that Sydney and Melbourne are among the most expensive Australian cities for office fitouts within the APAC region.
The firm’s ‘Asia-Pacific Fit-Out Cost Guide 2026’ also indicated that Brisbane and Perth offered the most affordable office fitout costs in Australia.
The report tracks workplace spending across 23 cities covering Australasia, East Asia, Southeast Asia, and India.
It found that costs were expected to rise between two percent and five percent over the next 12 months amid tightening labour markets, sustainability requirements and global trade uncertainty.
Among the APAC cities covered in the report, Singapore topped the list as the most expensive city for fitouts with an average cost of US$2029 per square metre, ahead of Tokyo (US$1994 per square metre) and Taipei (US$1593 per square metre).
Phnom Penh was at the other end of the list with an average cost of just US$375 per square metre.
Out of the Australian cities listed in the Cost Guide, Sydney was ranked in sixth place for average fitout costs, followed by Melbourne in seventh place, while Brisbane and Perth tied for ninth place.
Sydney has an average fitout cost of US$1334, just ahead of Melbourne at US$1300.
Brisbane and Perth were tied at US$934, almost 30 percent lower than Melbourne.
“The Australian office market is at very different points in its cycle depending on what capital city you look at. We have Sydney, where fitout costs remain high and will likely continue to grow due to labour and material cost pressures, but also softer markets like Brisbane and Perth where costs remain steady, but are overall more manageable, even with infrastructure booms underway for the Olympics in 2032,” Knight Frank Australia’s national head of Project Management Mark Blinco says.
“Melbourne remains a close second in terms of overall fitout costs, with longer than expected COVID-19 shutdowns still affecting return to office mandates, meaning many clients aren’t yet needing to refurbish space. However, this is expected to change in coming years, which will push up fitout costs to be on par with Sydney.”
The company says that across the Asia Pacific region, green building certifications, energy monitoring and tighter material compliance are raising baseline fitout costs.
“For occupiers managing portfolios across multiple Asia-Pacific markets, the challenge is no longer simply controlling fitout costs; it is understanding why those costs are moving and what that means for long-term portfolio strategy,” Knight Frank head of Global Portfolio Solutions for Asia-Pacific Francesco Demarco says.
“The return on capital investment is increasingly harder to justify. Labour constraints, sustainability compliance and trade-related material pressures are structural; they will not resolve quickly.”
A previous report from Knight Frank found that dwindling supply of newly-developed premium office space in Sydney’s CBD office market will drive future rental growth. It found that there will only be three major new CBD completions of more than 25,000 square metres by 2029, which will add a total of 163,000 square metres of office space.
Already 65 percent of that new supply is pre-committed, leaving only 57,000 square metres of new premium space – or one percent of total market stock – available for lease until 2027.
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