The city may see a turnaround as financial firms return and Singapore faces Grade-A space constraints.
Office fit-out costs remain relatively high due to labour market pressures, but they are still below comparable Japanese markets, according to Turner & Townsend’s Asia-Pacific fit-out cost guide.
The report said an average medium-specification office fit-out in Hong Kong costs about $21,686 per square metre (sq m).
Whilst Hong Kong went through a period of transition that benefited markets such as Tokyo, Kuala Lumpur, and Singapore, Turner & Townsend said positivity is beginning to return to the city.
The report cited renewed investment from financial players such as Jane Street and the expansion of major investment banks as signs of a possible turnaround.
It also noted that Singapore is struggling to accommodate demand for Grade-A space, which could support a reversal in Hong Kong’s fortunes in the short to medium term.
Elsewhere in Asia-Pacific, Sydney was the most expensive market for premium fit-outs at A$7,221 per sq m, whilst Tokyo and Osaka costs rose to JPY729,406 and JPY706,834 per sq m, respectively, as Grade-A office demand in Japan outstripped supply.
India was identified as APAC’s fastest-growing office market, driven by the expansion of Global Capability Centres, strong absorption, and robust pre-leasing activity.
Kuala Lumpur remained a lower-cost market at RM6,908 per sq m, supported by demand from technology and data centre clients.
Manila is also gaining traction as an offshoring hub, supported by its BPO experience, English-speaking talent pool