Asia Pacific Fit-Out Cost Guide 2019/2020 Edition

ASIA PACIFIC FIT-OUT COST GUIDE 2019/20 Edition

CONTENTS 2 FOREWORD

23 PROJECT STANDARD MATRIX

4 INTRODUCTION

25 APAC FIT-OUT COST INDEX

5

TECHNOLOGY AND THE EVOLUTION OF OFFICE SPACE

27 GLOBAL FIT-OUT COST INDEX

7

GUIDE ASSUMPTIONS

29 FIT-OUT COST BENCHMARKING TABLE

13

FIT-OUT SPECIFICATIONS – BASIC

33 LEASING COSTS

15

FIT-OUT SPECIFICATIONS – MEDIUM

37 FACILITIES MANAGEMENT COSTS

17

FIT-OUT SPECIFICATIONS – HIGH

42 NET PRESENT LIFECYCLE COSTING (NPLCC)

19

WORKPLACE FEATURES – TEAM TOTEM

47 REGIONAL FIT-OUT COST ANALYSIS

22

WORKPLACE FEATURES – STRETCH MEETING ROOM

69 KEY CONTACTS

1

APAC FIT-OUT COST GUIDE

FOREWORD Welcome to the Fit-Out Cost Guide 2019/20, the publication featuring in-depth analysis of office fit-out pricing that serves as a benchmark across cities in Asia Pacific.

This is an exciting time in the commercial office project market.

With workplace strategy gaining traction across markets, leveraging technology both to revise corporate strategies providing space as a service and leveraging technology to raise corporate strategies and to enhance workplace design has propelled huge step change in office fit-out construction. The modern workforce sees the office not only as a place of work but a place to connect, collaborate and be inspired.

The demand for the smart office is also affecting how landlords define a desirable building.

The smart office needs to be supported by the infrastructure and flexibility of a smart building.

The Asia Pacific Fit-Out Cost Guide 2019/20 explores the influence of the smart office on companies and the considerations needed to attract and retain top talent by providing them a

productivity-enabling environment where employees are efficiently equipped to focus on the tasks at hand.

Into the sixth edition, the APAC Fit-Out Cost Guide continues to provide clients and real estate professionals with true cost data to help with capital planning as well as benchmarking across the region and worldwide using the APAC and Global Indices. The Cost Guide continues to provide the Leasing and Facilities Management benchmarks as well the Net Present Life Cycle Costing that reflect holistic office investment costs.

While the Fit-Out Cost Guide 2019/20 serves as a handy reference, please feel free to approach a CBRE Project management consultant n your respective market, if you require a detailed project budget estimate.

ZAC ZDRAVEV Executive Director CBRE Project Management Global Leadership & Platform

MATTHEW EASTWOOD Head of EMEA Projects CBRE Global Workplace Solutions, EMEA

CBRE PROJECT MANAGEMENT

2

3

APAC FIT-OUT COST GUIDE

INTRODUCTION CBRE is pleased to present the 6th edition of the Asia Pacific Fit-Out Cost Guide. This premier guide provides market-leading insights into evolving workplace trends and disruptive trends, and the ultimate cost impact on occupiers.

With technology disruption, companies today must be nimble in tweaking their workplace strategies and quickly adapt to the changing requirements of a smart office. CBRE is equipped to make the smart office available to whoever in the market is ready for the change. In collaboration with CBRE Workplace Strategy, the Project Management team is well placed to guide the development of workplace vision. Not only do we ensure your workplace vision support your overall business strategy, CBRE also ensures that the solution delivered by technology include futureproofing of the space and ensuring seamless integration between applications and hardware.

CBRE continues to build on the in-depth review and relative analysis of previous editions including Workplace Strategy Design Options and Net Present Life Cycle Costing. Data used in the cost guide to develop indices for each corporate real estate cost area across an end-to-end solution is a collaboration across project management, commercial leasing and facilities management.

The APAC Cost Index serves as the leading benchmark for commercial office space across the region, while the Global Cost Index expands the outreach to an international view to benchmark project costs with similar specifications and design.

For specific project budgets, please consult the CBRE Project Management team in your market to assist with capital approval.

We look forward to collaborating with you in the future.

CBRE Singapore Office – HQ

CBRE PROJECT MANAGEMENT

4

TECHNOLOGY AND THE EVOLUTION OF OFFICE SPACE

Office space is now a service, made to fit business strategies where productivity is synonymous with technology-enabled collaboration, and employees demand modern conveniences and seamless technology integration so they can focus on the tasks at hand. Driving this technology investment shift is the demand for a unified visual display and communication platform.

To collaborate, people need places to connect. While this is a fundamental need, and employees are demanding more from their workplace; they expect high-speed WiFi, wireless charging, personalisation, online room booking and environmental controls among others. Consequently, companies have to evolve meet such demands in order to attract and retain talent. Accordingly, 70% of companies plan to increase investment in real estate technology within the next three years, and 30% see smart building technology as a factor in choosing a building.

Investment in workplace technology has been growing steadily for several years until, unexpectedly, in 2018, we saw a doubling of spend. This was attributed to a combination of increased adoption and workplace strategy implementation, leading to collaborative environments fully supported by technology.

5

APAC FIT-OUT COST GUIDE

PTS Consulting has reported that technology spend on office projects has increased 200% in the last 18 months. In marketleading technology projects, it is not usual for technology spend allocation to account for up to 40% of the total budget. It is important to note that although office space saw expected inflationary increase in cost between 2015 and 2017, the sharp rise in 2018 is due in large part to the notable increase in technology specification.

The technology to create a more efficient workplace is now in our hands, or more accurately, in our smartphones. To achieve corporate goals, company strategies have to drive the technology which should be designed and oriented to support how we work, how we connect with colleagues, and how to make routine and administrative actions simpler, allowing greater productivity. The step-change of unified communication and display technology in commercial offices is just the beginning.

The next step-change in technology investment spending could be just around the corner.

Technology-enabled (IoT) devices make it possible to collect data from all aspects of the corporate office, including BMS, security, lighting, meeting rooms and furniture, to name a few. All are sources of data; however, it is not until information is analysed and used properly that it benefits people and the business. In smart offices, data can and is being collected to help create a more efficient workplace and reduce carbon footprints.

Strategies to achieve business goals are being rewritten. The goals of productivity and profitability remain; however, the journey and the platform to achieve these are changing.

Companies are asking: What does "smart" building mean for me?

What does "smart" office mean for my business?

What is our "smart" vision and how does this support our corporate strategies?

Technology Cost

A digitally enabled office is no longer the domain of tech giants, but of businesses across all sectors. Companies must accept that what was once optional is now inevitable.

Y1

Y2

Y3

Y4 Future Proof

Y5

Y6

Y7

Without Future Proof

Y8

Y9

Y10

Answering these questions and developing a technology brief that supports corporate strategies will provide the basis for developing “space as a service” and the journey towards developing a suitable smart office.

The commercial office industry is recognising technology as a core requirement of an attractive, collaborative work environment.

Due to the criticality of integrated technologies and smart workplaces, there is an increasing demand for project management teams with the right technical skillset to get the brief, budget, design and implementation right.

This is important when a “result-oriented workforce” demands superior knowledge-based work environments that improve productivity and allow connection, collaboration and inspiration. Landlords are also recognising such effects and are looking to develop desirable assets. Demands have evolved from staying in sustainable and green buildings to providing infrastructure to accommodating smart offices.

We are transitioning to a new office experience that demands an evolution of the standard commercial building and transformation of our physical space.

ZAC ZDRAVEV Executive Director CBRE Project Management Global Leadership & Platform

CBRE PROJECT MANAGEMENT

6

GUIDE ASSUMPTIONS PRICING IN THIS DOCUMENT IS BASED ON THE FOLLOWING ASSUMPTIONS:

FACILITY MANAGEMENT COSTS ADDITIONAL GUIDE ASSUMPTIONS:

The commercial tower is a Grade A office building within the Central Business District with the following characteristics:

Include: • Cleaning • Mechanical & electrical maintenance • Security services • Utilities • Pest control • Mailroom • Reception • Landscaping • Confidential waste disposal

• A modern, flexible, column-free footprint of at least 15,000 sq ft • Total floor area of at least 300,000 sq ft • Sheltered parking with a GFA ratio of 1/2000 • Accessibility to public transport Commercial office assumptions: • Office size – 30,000 sq ft • Density range of 1 workstation to 110 to 150 sq ft • Office space is predominately open plan • Raised floor throughout the office space Fit-out costs include: • Consultant fees • Builders works • M&E works • Standard office FF&E • Physical IT infrastructure • Active network equipment • Physical security system • Audio visuals Exclusions: • Dedicated chiller and generator installation • Acoustic consultancy • Technology consultant fee • Consideration for building abnormalities or variances such as onerous landlord requirements

7

APAC FIT-OUT COST GUIDE

Exclude: • Dedicated chiller and generator maintenance • Property tax • Management fee

NET PRESENT LIFECYCLE COSTING (NPLCC) GUIDE ASSUMPTIONS: • 5-year commercial office investment period • Grade A office building and defined as the gross lease cost • Medium standard office fit-out construction rates • Medium standard FM service • FM cost adopts the CBRE Research y-o-y inflation rates • 10% discount rate applied for NPLCC Analysis

DRIVING DRAMATIC SHIFTS Currency Volatility against USD 5.2%

9.4%

3.8%

-3.8%

1.0% -5.8%

3.3%

China

3.3%

Philippines

2.2%

Australia Taiwan

4.8%

1.6%

-2.8%

7.7%

6.1%

1.0%

-1.9%

7.5%

0.9%

Japan South Korea Hong Kong

0.9%

2017-2019

Malaysia Singapore

5.6%

1.0%

-1.0%

1.7% 1.6% 3.2% 3.2% 2.1% 2.2% 3.0%

0.9% 1.4% 3.3%

3.9%

0.7% 1.0% 0.7% 0.4% 0.9% 1.0% 1.0% 1.6% 1.9% 2.3% 2.7% 3.5%

Vietnam

2015-2017

5.2%

1.5% 1.9%

India

1.5% 1.2%

1.0% 1.1%

Indonesia

3.0%

-2.1%

Thailand New Zealand

3.7%

-6.3%

Inflation

2017-2019

2015-2017

CBRE PROJECT MANAGEMENT

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9

APAC FIT-OUT COST GUIDE

BY THE NUMBERS

195

The average cost in USD per sq ft to fit-out a commercial office in Tokyo.

Claimed to be the most expensive market in APAC for three of the previous six years.

234

The average cost in USD per sq ft to fit-out a commercial office in New York.

Now the most expensive location when CBRE has delivered projects.

214

The cost in USD per sq ft per annum for commercial office space in Hong Kong.

The most expensive market to lease Grade A office space in Asia Pacific.

10.49

The cost in USD per sq ft per annum to manage office facilities in Sydney per annum.

33,485,025

The total investment in USD for a medium standard 30,000 sq ft office in Hong Kong over a five-year period.

CBRE Singapore Office – HQ

CBRE PROJECT MANAGEMENT

10

FIT-OUT COSTS

Facilities Management Costs

LIFECYCLE COSTING

Fit-out Costs

Leasing Costs

CBRE Singapore Office – HQ

11

APAC FIT-OUT COST GUIDE

CBRE PROJECT MANAGEMENT

12

FIT-OUT SPECIFICATIONS – BASIC

TEAM TOTEM

BREAKOUT AREA

SANDBOX

Specification

13

APAC FIT-OUT COST GUIDE

Basic

Basic

Basic

Medium

High

Density

Higher

Lower

Median

Lower

Lower

Work Type

Process

Knowledge

Knowledge

Knowledge

Knowledge

RECEPTION

TEAM COLLABORATION AREA

STRETCH MEETING ROOM

TOWN HALL Source: Layout and rendering by Haworth

CBRE PROJECT MANAGEMENT

14

FIT-OUT SPECIFICATIONS – MEDIUM

TEAM TOTEM

BREAKOUT AREA

SANDBOX

Specification Density Work Type

15

APAC FIT-OUT COST GUIDE

Basic

Medium

High

Median

Lower

Lower

Knowledge

Knowledge

Knowledge

RECEPTION

TEAM COLLABORATION AREA

STRETCH MEETING ROOM

TOWN HALL Source: Layout and rendering by Haworth

CBRE PROJECT MANAGEMENT

16

FIT-OUT SPECIFICATIONS – HIGH

TEAM TOTEM

BREAKOUT AREA

LIBRARY

SANDBOX

Specification Density Work Type

17

APAC FIT-OUT COST GUIDE

Basic

Medium

High

Median

Lower

Lower

Knowledge

Knowledge

Knowledge

RECEPTION

STRETCH MEETING ROOM

TOWN HALL

Source: Layout and rendering by Haworth

CBRE PROJECT MANAGEMENT

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WORKPLACE FEATURES – TEAM TOTEM What is a Team Totem?

A team totem is a team identifier; a place for team members to call home within a sea of diverse and unassigned work settings, whereas most desks are “clean desk” at night, a totem can feel lived in; it’s the heart and soul of the team. Totems are typically located in the midst of open desk areas; making them easily accessible to team members, and breaking open space into smaller, more intimate and private work areas.

Features of a Team Totem: • Totems are assigned to larger departments • Personalisation is encouraged: Display team awards, photographs, decorations and snacks • On-demand home base for dynamic workers*: place to leave laptop when intermittently absent most of day • Day lockers to place bags/personal items for visitors • Ability to locate team support easily as they have a reserved seat^ within or adjacent to the totem • Team support become the curators of a team totem *Dynamic workers: employees who move around for meetings & rarely sit to work for long hours ^not to be confused for assigned seats. Support staff has to share their workstations when they are not in office

19

APAC FIT-OUT COST GUIDE

CBRE PROJECT MANAGEMENT

20

21

APAC FIT-OUT COST GUIDE

WORKPLACE FEATURES – STRETCH MEETING ROOM What is a Stretch Meeting Room?

Multi purpose meeting room with the ability to ‘flex’ on demand to suit the purpose and size of the meeting. Table size is deliberately small to help the room feel generous for its typical occupancy of 3 people whilst accommodating 8 to 10 people at peak. The open space thus opens up many different ways to use the room. Applying a 'stretch' approach to meeting rooms generates significant space savings and can enable clients to build more rooms using less space.

Features of a Stretch Meeting Room: • Enclosed collaboration space for 3+ pax • Good for private confidential discussion • 3 modes of meetings – discussion around table, using TV monitor, whiteboard creative sessions • Ability to accommodate up to 8 pax using leaning rails & stools.

• Good for video conferences

CBRE PROJECT MANAGEMENT

22

PROJECT STANDARD MATRIX PROJECT STANDARD Description of items

Basic

Medium

High

Process BPO Knowledge

Knowledge

Knowledge

N

N+1

2N

BASIC OFFICE FUNCTIONALITY

Work type Collaboration area Town Hall M&E redundancy WALL & PARTITIONS

Plasterboard with fabric finish / to slab with high acoustic rating Double-glazed partition Single-glazed partition Plasterboard walls Operable wall Open ceiling FEATURE FLOOR FINISHES

Polished timber Marble / stone slab finishes Carpet tile SYSTEM FURNITURE

Flexibily in workspace churn & expansion Powerhoop as an uninterrupted footprint division Resolved design & seemless connectivity Simplicity with reduced kits-of-parts Unified look and combined usage Cable through and various cable outlet application Height adjustability STORAGE

Lockers Mobile pedestal / caddy

23

APAC FIT-OUT COST GUIDE

PROJECT STANDARD Description of items

Basic

Medium

High

Access control doors

5

5

10

CCTV

3

3

6

3 months

3 months

6 months

100

200

>400

PDU

2

2

4

Racks

1

1

2

100

200

>400

SD – Below 3000 lumens

HD – Below 5500 lumens

UHD – Above 5500 lumens

TASK CHAIRS

Asymmetrical lumbar support system Pelvic support 4-D arms and seat pan adjustments Upright back lock Supportive mesh with tension zones Synchronized tilt mechanism Supportive mesh with optional upholstery back PHYSICAL SECURITY SYSTEM

System via IT network

Data storage PHYSICAL IT INFRASTRUCTURE

Eternet cables – Cat 6A Data ports

Redundancy ACTIVE NETWORK EQUIPMENT

40Gbps backbone End points Redundancy AUDIO VISUAL

Display Intergrated ceiling mounted sound distribution system Video conference Lighting integration Room booking sytem integration Digital signal processor

Source: Layout and rendering by Haworth

CBRE PROJECT MANAGEMENT

24

APAC FIT-OUT COST INDEX The APAC Fit-Out Cost Index enables direct comparison of costs across different cities, highlighting the relative cost of an Office Fit-Out in each market.

The index leverages our empirical project data to provide a relative cost-to-build metric, setting Shanghai as the baseline. This industry-leading benchmark data, paired with CBRE’s regional presence and market knowledge, allows us to partner with our clients to provide our expertise and offer the best solutions to achieve client’s objectives.

The APAC Fit-Out Cost Index is for guidance purposes only. For detailed budgetary advice or for support in developing an estimate for a specific project, please contact your local project management lead for more information and support. Once a present day benchmark is established, the APAC Fit-Out Cost Index can be used to estimate the likely costs to build the same commercial space again across APAC.

Japan has reached the highest point to date with regard to construction cost since the global financial crisis catalyzed by the Lehman Brothers bankruptcy in 2008. Demand for construction service, in no short order caused by the Olympics, disaster recovery, and continuous large-scale development located on the central area of the city, have led to a sustained year-on-year growth in construction costs.

HISANAO KAJIURA Executive Director Japan Project Management 25

APAC FIT-OUT COST GUIDE

der ab ad

ong

1.21

Ho ng K

8

0.5

Hy

Sydne y

Tokyo

ok Bangk

pur

um la L

Kua

1.30

0.58

1.2

1.60

0

1.40

ul

3 0.6

6

1.1

1.20

Seo

1.00 ila

0.63

0.80

1.16

Man

0.60

Perth

0.40

1.06

0

6

arta Jak

1.0

0.7

5

0.69

i

Mumba

1.13

0.20

0.65

Bangalore

0.8

Brisbane

klan

d

2

2

C

1.0

ore

Taip ei

Singap

ai

Guangzhou

ngh

0.95

Sha

0.93

1.00

g ijin

0.86

Be

HC M

Auc

Melbourne

Disclaimer: This graph shows the capital expense multiplier for the design and construction of the same office project across Asia Pacific using Shanghai as the unit index. This cost index should be used as a guide only, for actual project budget estimates please contact the CBRE Project Management Division Lead in your city.

CBRE PROJECT MANAGEMENT

26

GLOBAL FIT-OUT COST INDEX The Global Fit-Out Cost Index highlights the relativity of key markets around the world. Cost Indices are a useful resource in enabling direct comparison of potential project cost to assist clients in their decision-making process.

Trade wars have become synonymous with uncertainty. What started off between the US and China has now escalated to include Europe. In what was unthinkable 2 years ago, manufacturing industries are starting to leave China, and could create a domino effect on other industries.

Inter-country tariffs are further compounded by escalating unpredictability in foreign exchange. The result of this uncertainty has driven what was once an experiment in the use of co-working space to a legitimate corporate real estate strategy.

The risks associated with uncertainly can be somewhat mitigated in corporate real estate investments through robust benchmarking which includes 7 categories of capital cost in 23 key global markets.

CBRE leads the market in benchmarking the trends among progressive corporations who have recognised Space-as-a-Service as a requirement to achieve the goals of corporate strategies. A key trend identified is the larger portions of capital expenditure demanded for technology to support the development of smart offices. The modern workforce expects an equally modern office to optimise productivity. This is fast becoming a focus for companies to attract and retain talent.

The Global Index is presented as a benchmarking guide. For budget estimates on specific projects, please contact the CBRE Project Management Division lead from the relevant market who can provide you with relevant and accurate information.

SENG HAN LEE Associate Director CBRE Project Management Global Leadership & Platform

27

APAC FIT-OUT COST GUIDE

mb

ai

ur t ttle Sea

0.6 9

1.40 1.20 1.00

0.75

ity

1.35

0.80

Paris

0.88

0.60

1.30

Dallas

3

1

ico C

1.4

1.60

1.4

Mex

1.47

Fr a nkf

8

0.6

San Fr ancisco

New York

o Santiag

otรก Bog

Mu

1.56

0.67

0.40

Tokyo

0.20

1.25

0.90 0.93

1.22

Buenos Aires

0

pore

Joha

ai

1.0

Syd ney

0

Madrid

o Paul

ng

n

Dublin

Sรฃo

Ko

1.07

o Lond

1.03

1.17

ng

1.02

Ho

Atl

burg

1.2

0

ant a

ngh Sha

nnes

1

0 1.0

1.2

Singa

Chicago

Disclaimer: This graph shows the capital expense multiplier for the design and construction of the same office project across Asia Pacific using Shanghai as the unit index. This cost index should be used as a guide only, for actual project budget estimates please contact the CBRE Project Management Division Lead in your city.

CBRE PROJECT MANAGEMENT

28

FIT-OUT COST BENCHMARKING TABLE Region North Asia

South Asia

USD / sq ft

USD / sq ft

USD / sq ft

Reinstatement USD / sq ft

South Korea

Seoul

114

164

243

20

Japan

Tokyo

117

178

291

50

Beijing

98

141

220

13

Shanghai

94

136

219

12

Guangzhou

94

136

198

11

Taiwan

Taipei

88

121

178

11

Hong Kong

Hong Kong

109

164

267

37

Sydney

119

171

252

17

Melbourne

111

160

237

14

Perth

109

167

243

14

Brisbane

104

150

222

14

New Zealand

Auckland

87

151

232

15

Philippines

Manila

66

86

132

10

Vietnam

HCMC

84

119

166

3

Indonesia

Jakarta

74

108

161

5

Malaysia

Kuala Lumpur

63

77

120

5

Singapore

Singapore

91

130

195

11

Thailand

Bangkok

54

74

131

11

Mumbai

66

97

147

3

Hyderabad/Kolkata/Pune

60

87

135

3

Bangalore/Chennai/Delhi

61

91

140

3

Australia

India

CBRE has analysed empirical data from completed projects across multiple industries for each market. The fit-out cost table provides the cost of projects in three high level categories. The figures provided include seven common categories: Consultancy Fees,

29

HIGH

City

Greater China

South East Asia

MEDIUM

Country

China

Pacific

BASIC

APAC FIT-OUT COST GUIDE

Builder Works, M&E Works, Fixed Furniture and Equipment, IT, AV, and Security.

This table only serves as a guide. For budget estimates, please contact CBRE Project Management Division Leads in the specific

market. The typical reinstatement rates for offices have been included; however, note that rates may vary due to landlord requirements, reinstatement agreements and project brief, just to name a few variables.

The work we do and how we do it have been fundamentally changed by the exponential rise of technology. Coupled with a multitude of other factors disrupting the current workplace paradigm, these historical changes are pushing us to re-imagine the future of work.

Today’s workplace has to be as connected and agile as the people using it. To address these challenges, we have to deliver workplaces that are able to respond rapidly to this ephemeral brave new world.

HAWORTH

CBRE Singapore Office – HQ

CBRE PROJECT MANAGEMENT

30

LEASING COSTS

Facilities Management Costs

LIFECYCLE COSTING

Fit-out Costs

Leasing Costs

CBRE Korea Office

31

EMEA FIT-OUT COST GUIDE

CBRE PROJECT MANAGEMENT

32

LEASING COSTS With the shifts in employee demographics and the expanding influence of millennials in the workforce, the design and use of real estate is now more focused towards driving productivity and enhancing experiences.

This is steering leasing decisions into assets and buildings that are designed for the future, empower employee collaboration and build community connections.

ROHINI SALUJA Executive Director, Asia Pacific CBRE Advisory & Transaction Services

33

APAC FIT-OUT COST GUIDE

The table provides the leasing costs in USD$ per sq ft per annum on Net Floor Area basis for Grade A office building in the CBD of each market, unless otherwise stated. The figures are presented on an effective basis which excludes landlord benefit offers and rent-free periods.

Any inclusion of service charges are varied by markets, depending on local practice.

CITIES

GRADE A

Hong Kong – Central

214

Tokyo

108

Singapore

100

Beijing

89

Shanghai

78

Delhi

63

Mumbai – BKC

62

Hong Kong – Kowloon East

55

Sydney

54

HCMC

49

Guangzhou

48

Taipei

46

Seoul

43

Bangkok

38

Bangalore

31

Melbourne

31

Auckland

25

Gurgaon

25

Brisbane

25

Perth

21

Kuala Lumpur

20

Hyderabad

10

Pe

rth

Sin gap ore

1.18

1.0

8

2.40

jing

4

1.80

0.2

Bei

1.0

4

2.10

Bris

0.29

1.50 1.20

1.00

ban e

2.75

Tokyo

ad

ur mp

0.2

Hong Kong – Central

ab Hyder

u la L Kua

3

0.11

hai

Shang

0.90

0.29

0.60

0.75

Gurgaon

0.30

Delhi

0.35

Hong Kow Kong – loon East

e ourn b l e M

6

n

0.4

5

Ban

0.54 zhou

Taipei

Guang

0.53

0.5

C

0.51

Syd ney

HCM

gko k

0 Seoul

lor ga

0.6 0

0.3 e

Ba

Mumbai – BKC

0.61

0.30

Auckland

0.68

0

CBRE PROJECT MANAGEMENT

34

FACILITIES MANAGEMENT COSTS

Facilities Management Costs

LIFECYCLE COSTING

Fit-out Costs

Leasing Costs

CBRE Singapore – City Office

35

APAC FIT-OUT COST GUIDE

CBRE PROJECT MANAGEMENT

36

FACILITIES MANAGEMENT COSTS The operating cost of a corporate office within this document is defined as the Facilities Management (FM) cost. The FM cost shall be classified into nine key and most common components namely, cleaning, M&E maintenance, pest control, security services, utilities, mailroom, confidential waste, landscaping and reception. Depending on the facility, the cost may differ on the final service standard adopted by the client.

Key Components

While the key cost drivers of labour and exchange rate changes have varied over the region, the overall ranking of highest to lowest location has had little change in the last year.

CBRE is working hard to implement new technologies to significantly improve the ease of doing business with and to continuously drive efficiencies with our Supply Partners.

Sustainability and Environmental Social and Corporate Gorvenance (ESG) are increasingly becoming areas of interest where a new Supplier Portal deployment is also a key focus and differentiator.

CLEANING

SECURITY SERVICES PEST CONTROL

LANDSCAPING

MAILROOM

RECEPTION

CONFIDENTIAL WASTE

THERESA RYNARD COO, APAC CBRE Global Workplace Solution 37

APAC FIT-OUT COST GUIDE

UTILITIES

M&E

1.0

9

1.40

nila

Sin gap ore

1.22

1.60

7 0.5

Ma

1.31

Perth

abad

Hyder

re alo ng Ba

0.52

Sydney

FACILITIES MANAGEMENT COST INDEX

9

1.0

0.5

g

ijin

1.20

4

1.00

Be

0.80 0.60

0.59

kok

1.03

Bang

Hong

Kong

0.40 0.20

1.00

0

6

0.9

0.6

ane risb

Tokyo

Shang

hai

8

0.62

ai Mumb

1.02

0.62

Jakarta

B

Guangzhou

Kuala

Lump ur

e urn

and

0.95 i Taipe

0.90

ckl

0.81

Au

0.9

1

lbo

ul

7

0.8 Me

Seo

Disclaimer: This graph shows the FM Cost index across Asia Pacific using Shanghai as the unit index. This cost index should be used as a guide only, for actual project budget estimates please contact the CBRE EFM Division Lead in your city.

CBRE PROJECT MANAGEMENT

38

FACILITIES MANAGEMENT COSTS Shown below are the unit rates per sq ft in USD for various components annually. Rates in different locations are directly affected by the labour market condition and local tariff rates.

RECEPTION

MAILROOM

$0

$2

$3

Sydney

1.45

Perth

1.34

0.91

Singapore

1.54

1.00

Beijing

1.29

0.93

1.36

0.55

Hong Kong

$4

$5

1.63

1.84

Shanghai

1.24

0.89

1.04

Seoul

1.18

0.87

1.60

1.78

Auckland

1.37

0.88

1.25

1.39

Taipei

1.33

0.55

1.28

Guangzhou

1.12

0.80

0.94

Brisbane

1.00

Mumbai

0.85 0.62 0.75 0.83

Jakarta

0.84

0.46 0.60 0.93

1.79 2.00

0.93

0.90

1.12

0.89

0.89

4.94

1.00

0.84

4.94

0.85 0.42 0.90

1.00

0.53

0.89

4.70

Manila

0.75 0.43 0.92

1.02

0.70

0.76

4.69

Bangalore

0.80 0.57 0.69

Hyderabad

0.76 0.52 0.63 0.70

APAC FIT-OUT COST GUIDE

0.81

0.79

8.72

8.35 8.18

7.74 7.60

7.20

6.48 6.46

0.63 5.27

Bangkok

0.76

1.30

1.43

1.15

0.86

9.77

7.87

0.86 0.95

1.71

10.49

8.00

1.44

1.98

1.16

1.04

0.81

1.43

$11

8.21

1.45

1.98

1.07

1.14

0.59

1.19

1.00

1.07

1.67

1.42

Melbourne

0.74

1.57

1.41

1.70

1.51

1.80

$10

1.58

1.93 2.07

1.47

$9

2.26

1.24

1.33

$8 2.42

1.56

1.09

0.790.50 0.90

$7

1.81

1.41

0.70

$6

UTILITIES

M&E

1.94

1.75

0.98

LANDSCAPING

CONFIDENTIAL WASTE

Tokyo

Kuala Lumpur

39

$1

PESTS CONTROL

SECURITY

CLEANING

0.81 4.54

0.74 0.75 4.19

CBRE Korea Office

CBRE PROJECT MANAGEMENT

40

41

APAC FIT-OUT COST GUIDE

NET PRESENT LIFECYCLE COSTING (NPLCC)

Net Present Lifecycle Costing is a quantitative estimate of the total cost of a commercial office investment in present value.

The expenses included are capital or office fit-out costs, leasing costs, facilities management costs and reinstatement costs.

Facilities Management Costs

GUIDE ASSUMPTIONS:

LIFECYCLE COSTING

Fit-out Costs

Leasing Costs

• 5-year commercial office investment period • Grade A office building and defined as the gross lease cost • Medium standard office fit-out construction rates • Medium standard FM service • FM cost adopts the CBRE Research y-o-y inflation rates • 10% discount rate applied for NPLCC analysis

CBRE India Office – HQ

CBRE PROJECT MANAGEMENT

42

NET PRESENT LIFECYCLE COSTING The below table presents the NPLCC for each market over a period of 5-year investment and applying the USD per sq ft cost to a medium standard 30,000 sq ft office.

FIT-OUT COST Hong Kong

$164

Tokyo

$178

Singapore

LEASING COST

FM COST

REINSTATEMENT

$892

NPLCC (USD/sq ft)

NPLCC (USD-30,000 sq ft)

$1,116

$ 33,485,025

$450

$697

$ 20,919,175

$130

$418

$592

$ 17,772,166

Beijing

$141

$370

$556

$ 16,682,259

Shanghai

$136

$324

$503

$ 15,087,896

Sydney

$171

$223

$451

$ 13,536,943

Seoul

$164

$179

$391

$ 11,721,825

Mumbai

$97

$258

$379

$ 11,355,928

Delhi

$91

$263

$376

$ 11,286,954

Guangzhou

$136

$200

$375

$ 11,237,630

Taipei

$121

$193

$354

$ 10,618,643

Melbourne

$160

$128

$326

$ 9,776,599

Perth

$167

$86

$305

$ 9,146,581

Auckland

$151

$104

$299

$ 8,963,257

Brisbane

$150

$102

$284

$ 8,523,354

Bangkok

$74

$160

$259

$ 7,819,303

Bangalore

$91

$128

$242

$ 7,254,613

Gurgoan

$91

$103

$216

$ 6,490,460

Kuala Lumpur

$77

$83

$207

$ 5,753,043

$151

$ 4,538,256

Hyderabad $0

43

$87 $43 $100

$200

$300

APAC FIT-OUT COST GUIDE

$400

$500

$600

$700

$800

$900

$1,000

$1,100 $1,200

The graph below illustrates a yearly cash-flow outlay considering a typical 5-year lease period for a medium standard 30,000 sq ft office fit-out in Hong Kong brought forward to present value.

FIT-OUT COST

Year 1 $400

LEASING COST

Year 2

FM COST

Year 3

REINSTATEMENT

Year 4

Year 5

$8 $37

$300 $214

$8

$9

$9

$214

$214

$214

$223

$223

$9

$200 $100

$164

$214

$0 Total Annual Cost

NPLCC

$386

$1,116 per sq ft

$222

$260

$33,485,025 for 30,000 sq ft

All costs are expensed in the year in which the activities are billed. Most office fit-out projects can be completed within a 12-month periods. For the purpose of this exercise, all capital expenses are accounted for in Year 1 and no “rent free” period has been assumed. Many markets commence lease payment from the point of possession and this has been adopted for direct comparison.

CBRE PROJECT MANAGEMENT

44

CBRE India Office – HQ

45

APAC FIT-OUT COST GUIDE

Gur

2.40

1.1

8

2.10

gao

n

gap ore

1.39

Sin

r pu Lum

8 0.3

2.22

Tokyo

abad Hyder

ala Ku

0.30

Hong Kong

NET PRESENT LIFECYCLE COSTING INDEX

jing

3 0.4

1 1.1

1.80 1.50

Bei

1.20 0.90

0.48

alore

1.00

Bang

0.60

0.52

0.78

0

9

A

0.7

0.5

d lan uck

Sydney

Seoul

5

0.56

e

n Brisba

0.90

0.30 Bangkok

hai

Shang

ai

urne

Taipei

zhou

Melbo

0.74 Guang

0.70

i

0.65

lh De

0.7

1

h

mb

5

0.6 Per t

Mu

Corporate real estate decisions should be made with holistic office investment information benchmarked regionally. This provides the opportunity to create accurate capital plans as well as help decide where projects can be activated based on current macro economic factors.

CBRE, through extensive data analysis from each GWS business line, is able to provide our clients a concise index and representation of the major cost considerations for their commercial office investment. The NPLCC can help develop real estate strategies that support corporate objectives.

Disclaimer: This graph shows the NPLCC index across Asia Pacific using Shanghai as the unit index. This cost index should be used as a guide only, for actual project budget estimates please contact the CBRE Project Management Division Lead in your city.

CBRE PROJECT MANAGEMENT

46

REGIONAL FIT-OUT COST ANALYSIS

CBRE Singapore – City Office

47

APAC FIT-OUT COST GUIDE

CBRE PROJECT MANAGEMENT

48

JAPAN COST ANALYSIS – TOKYO TOKYO Tokyo is likely to see a gradual shift from a landlords’ market to an occupiers’ market, with increase in new supply in 2019. Even so, in the environment with low vacancy rate, office demand still remains solid on the back of the stable economy and corporate profits. On the other hand, Japan has a labor shortage problem due to declining birthrate and an aging population, which have caused companies to have common issues as securing excellent human resources, activating collaboration and communication, improving productivity, and improving engagement.

HISANAO KAJIURA Executive Director Tokyo Project Management +81 3 5288 9749 hisanao.kajiura@cbre.co.jp

To solve the above issues, many companies are considering workplace strategies and changing office locations. Office design and specifications have become more sophisticated than ever with unconventional amenity space, which also becomes a big reason of overall cost increase. In this situation, due to improve communication and productivity, companies have a tendency to use ABW for space saving and consider small-scale & multifunctional offices also increased.

USD289 0.7%

USD178 0.7%

10.4% 8.7%

7.5% 27.3%

0.8% 10.4% 8.2%

26.4%

10.5%

29.8%

27.4%

31.2% 29.7%

12.9% Basic

49

APAC FIT-OUT COST GUIDE

14.4% Medium

Soft Cost Builder Works

10.4% 8.0%

AV IT

11.8%

USD117

Security

12.8%

High

M&E Works Furniture

SOUTH KOREA COST ANALYSIS – SEOUL SEOUL

BRUCE LEE

Economic growth is expected to weaken in 2019 as Korea enters the late stage of the upward cycle.

Growth will be constrained in 2019 by the large volume of new stock scheduled for completion in 2020, despite that the lack of new supply in 2019 is expected to ease pressure on vacancy.

Coworking and IT will remain major demand drivers and will continue to drive absorption in Seoul.

Growth is expected in the flexible space providers as they are at an early stage in the real estate cycle..

Senior Director South Korea Project Management +822 2170 5870 bruce.lee@cbrekorea.com

USD243 1.5% 15.0%

USD164 1.0%

USD114 1.1% 6.6% 10.5%

9.3%

Security

AV IT Soft Cost

13.8%

Builder Works M&E Works

5.6%

Furniture

10.2% 9.5%

27.9%

12.3% 35.8% 22.3%

36.8% 18.3% 20.5% 12.3% Basic

15.9% Medium

13.9% High CBRE PROJECT MANAGEMENT

50

TAIWAN COST ANALYSIS – TAIPEI TAIPEI Taipei office capital values were unchanged despite the robust leasing market. Investors generally remained price-conscious and were only willing to pay market prices.

Overall office net absorption remained strong in 2019. Leasing activity was driven by flight to-quality from occupiers in the technology and pharmaceutical industries. Several of such companies increased the size of their space when relocating to new premises.

JAMES HO Senior Director Taiwan Project Management +886 2 7706 9538 james.ho@cbre.com

Tech companies will remain active in seeking relocation options, while financial institutions will mainly adopt a conservative approach towards real estate strategy. Grade B office rents are forecast to grow slowly, as institutional landlords raise their rental expectations.

USD178 1.3%

USD121 USD88 0.9% 7.8% 10.3% 7.3%

0.9% 11.2% 10.2% 6.2%

51

APAC FIT-OUT COST GUIDE

13.7% 4.9%

22.6%

Security

AV IT Soft Cost Builder Works

30.7%

M&E Works Furniture

34.1%

34.7% 23.5%

15.2%

20.9%

15.4%

14.8%

13.3%

Basic

Medium

High

HONG KONG COST ANALYSIS HONG KONG

STEVE PALFREY Executive Director Greater China Project Management +852 2820 2996 steve.palfrey@cbre.com.hk

Escalating economic risks in the global economy coupled with the challenging local instability in Hong Kong, will likely prolong corporates’ decision-making process in H2 2019. New and expansionary demand will be kept to a minimal. Cost-saving is expected to remain a key theme and hence there will be growing demand for space in decentralized submarkets where connectivity is improving. Space availability in the core submarkets is gradually climbing but limited new supply in the pipeline will temper the rent decline. Market indications point towards a softening of local construction cost increases that may offer a Capex relief in 2020. Despite short-term uncertainties, the fast-tracked development of the Greater Bay Area will provide support to the Hong Kong’s economy and real estate market in the long-run.

USD267 0.8%

USD154

USD109 0.7% 6.0% 7.9% 11.1%

0.6% 7.9% 7.2% 8.4%

Security

9.7%

AV

8.7%

IT

6.5%

Soft Cost Builder Works M&E Works

28.3%

Furniture

27.8% 29.0%

29.0% 32.1% 32.5% 12.8%

16.0%

Basic

Medium

17.0% High

CBRE PROJECT MANAGEMENT

52

CHINA COST ANALYSIS – BEIJING / GUANGZHOU BEIJING Office space demand remained driven by finance, technology and business services sector. Aged standard Grade A and Grade B buildings in CBD faced fierce competition. To attract and retain high profile tenants, several landlords lowered rents. Economic uncertainty, coupled with new high quality supply, will continue to drive vacancy rate up with rent on a downward trend.

USD220

CATHERINE XIONG Executive Director China Project Management +86 10 8588 0788 catherine.xiong@cbre.com.cn

1.2%

USD141 USD98 0.9% 7.8% 10.4% 14.6% 22.7% 27.4%

0.8% 10.8% 9.9% 10.2%

13.8% 12.5% 7.2% 22.5%

AV IT Soft Cost Builder Works M&E Works

22.8% 29.0%

Security

29.0%

16.2%

16.5%

13.8%

Basic

Medium

High

Furniture

GUANGZHOU

USD198 USD136 USD94 1.0% 8.1% 10.8% 14.4%

0.9% 11.2% 10.3% 8.5% 25.6%

1.4% 15.3% 13.8% 6.9% 23.6%

28.7%

25.8%

16.1% 10.4%

14.8%

13.2%

Basic

Medium

High

28.9%

APAC FIT-OUT COST GUIDE

AV IT Soft Cost Builder Works M&E Works Furniture

26.4%

53

Security

CHINA COST ANALYSIS – SHANGHAI SHANGHAI Key demand drivers in market includes consumer product manufactures, third-party space providers and professional service companies. However existing tenants are turning cautious and focused on cost saving in view of global economic uncertainty. This results in increment of renewals than expansion or relocation. New supplies injected into the market could potentially lead to decline in rental rates.

USD219 1.2% 13.9%

Security

AV IT Soft Cost

12.5%

USD136

Builder Works M&E Works

7.2%

Furniture

0.9% 11.2%

USD94

10.3%

1.0% 8.1% 10.8%

10.9%

13.6%

21.0%

21.7% 29.7%

22.4% 29.5% 28.1% 16.0%

15.5%

14.5%

Basic

Medium

High CBRE PROJECT MANAGEMENT

54

INDIA COST ANALYSIS – MUMBAI MUMBAI Several new supply addition was witnessed in Navi Mumbai and Western Suburbs. Space take-up continue to remain strong primarily driven by tech companies, BFSI and co-working space operators.

Increase in rental values observed in BKC, Western Suburbs 2 and Navi Mumbai. Developers are moving towards smarter space solutions by incorporating technology from workplace solutions to facilities management.

GURJOT BHATIA Managing Director India Project Management +91 114 249 0200 gurjot.bhatia@cbre.com

USD147 1.8% Security

AV

20.7%

M&E Works

18.6%

15.7%

USD66

6.5% 14.4%

1.4% 11.6% 15.5%

8.9%

17.7%

19.9%

10.0% 20.0%

25.9% 30.3%

30.1%

55

APAC FIT-OUT COST GUIDE

Soft Cost Builder Works

USD97 1.2%

IT

11.4%

9.6%

8.8%

Basic

Medium

High

Furniture

INDIA COST ANALYSIS – HYDERABAD / KOLKATA / PUNE HYDERABAD / KOLKATA / PUNE Hyderabad – Absorption of space observed in IT developments along IT Corridor II with additional supply in the pipeline. Key drivers include tech companies, flexible space operators and BFSI firms. Vacancy rates maintained tight while rental rates continued to increase.

Pune – Tech firms and BFSI companies continued to dominate space take-up. This is followed closely by flexible space operators.

Kolkata – Negligible supply and increased demand continued to drive rental rates up.

USD135 2.0% Security

AV

22.6%

IT Soft Cost Builder Works

USD87 1.4%

USD60

17.5%

1.5%

16.0%

12.8% 17.1% 13.7%

12.4%

20.4%

Furniture

9.9%

15.4%

18.3%

19.2% 27.5%

M&E Works

22.5% 25.9%

8.2%

8.5%

7.2%

Basic

Medium

High

CBRE PROJECT MANAGEMENT

56

INDIA COST ANALYSIS – NEW DELHI / BANGALORE / CHENNAI NEW DELHI/ BANGALORE/ CHENNAI NCR – Noida and Gurgaon contributed to the major supply addition in the region with tech companies dominating the leasing activity followed by e-commerce, engineering and manufacturing sectors along with flexible space operators.

GURJOT BHATIA Managing Director India Project Management +91 114 249 0200 gurjot.bhatia@cbre.com

Bangalore – Flexible space operators dominated leasing activity, followed by tech and pharmaceuticals companies. Limited availability of quality space led to an increase in rental values across NBD, EBD, ORR & PBD.

(10) New Delhi/Bangalore/Chennai

Chennai – Supply addition witnessed in CBD and Off CBD with an increase in leasing activity in OMR Zone 3 & Ambattur due to sustained occupier interest. Key space absorption driven by tech companies followed by flexible space operators, as well as engineering and manufacturing firms.

USD140 1.9% Security

AV

21.8%

IT Soft Cost Builder Works

USD91 1.3%

USD61

16.7%

1.5%

15.3%

12.6%

9.3%

19.6%

6.8% 17.0%

16.8% 11.7%

19.4%

19.4% 29.0%

57

APAC FIT-OUT COST GUIDE

25.0% 28.7%

9.0%

9.3%

7.9%

Basic

Medium

High

M&E Works Furniture

SOUTH-EAST ASIA COST ANALYSIS – SINGAPORE SINGAPORE The technology and co-working sectors remained active with sporadic growth seen in other industries such as the life insurance industry. There was generally more caution portrayed by firms as they ascertain the full impact of the trade war, with more opting for renewals rather than committing capital expenditure to expand or relocate. Trends of consolidation, decentralisation and drive towards efficiency were also seen in major sectors.

GARTH CHAPMAN Managing Director SEA Project Management +65 6229 1114 garth.chapman@cbre.com.sg

USD195 1.1% Security

20.0%

AV IT Soft Cost Builder Works

10.8%

USD130

4.1%

M&E Works Furniture

0.7%

USD91 0.8% 6.2% 8.6% 8.4%

11.4% 8.3% 5.6%

24.5%

26.3% 28.7%

25.9% 31.8%

33.8%

13.5%

15.9%

Basic

Medium

13.6% High CBRE PROJECT MANAGEMENT

58

SOUTH-EAST ASIA COST ANALYSIS – KUALA LUMPUR KUALA LUMPUR

GARTH CHAPMAN Managing Director SEA Project Management +65 6229 1114 garth.chapman@cbre.com.sg

In spite of less certain macroeconomic factors, Malaysia remains competitive. The country offers the fourth most competitive leasing costs and second most competitive fit-out costs in Asia Pacific, not to mention being the eighth most competitive nation from a facility management cost perspective. The financial sector still leads the office market in KL where buildings in proximity to public transport are most demanded. The market, as a whole though, is a tenants’ market, with the Klang Valley area having seen two consecutive years of a 10 percent increase to the available office space. Occupancy rates that were previously hovering at 80 percent are under pressure which places the onus on developers to boost the attractiveness of their offerings to prospective tenants. CBRE are not only more active in the office fit-out market for new set-ups and relocation projects, but also in supporting owners improve their spaces' desirability.

USD120 1.8%

Security

AV

20.6%

USD77 USD63 1.2% 9.8% 13.1%

1.3% 16.0% 14.6% 6.1%

Soft Cost Builder Works

18.6% 4.1%

18.9%

8.3% 24.3%

21.1% 22.4%

30.4%

59

APAC FIT-OUT COST GUIDE

IT

25.9%

12.9%

15.0%

13.6%

Basic

Medium

High

M&E Works Furniture

SOUTH-EAST ASIA COST ANALYSIS – VIETNAM HCMC / HANOI Metropolitan areas are expected to welcome a wave of new supply of mostly Grade B offices.

We expect rental rates to stabilised after the injection of new supplies in the market. Demand for office space remained high due to accelerating expansion of traditional sectors as well as stronger demand from flexible space providers. Office space usages continue to reshape with the incorporation of technology into workplace. This results in increased flexibility and this will be crucial to evolving business context.

USD166 1.5% Security

14.4%

USD119

USD84

10.0%

1.0%

6.3%

IT Soft Cost

14.0%

Builder Works M&E Works

0.9% 10.1%

AV

4.9%

Furniture

18.9%

7.2% 10.4%

21.3%

8.1% 24.6% 24.4% 29.3% 31.0% 22.1%

21.7%

17.9% Basic

Medium

High CBRE PROJECT MANAGEMENT

60

SOUTH-EAST ASIA COST ANALYSIS – BANGKOK BANGKOK

GARTH CHAPMAN Managing Director SEA Project Management +65 6229 1114 garth.chapman@cbre.com.sg

Bangkok office supply totalled 8.95 million sqm in Q2 2019 with a further 1.2 million sqm in the planning or early construction stages due to be completed by 2022. Due to the lack of supply coming online in the next two years, we are seeing an increase in demand from clients in the corporate office sector for restack, refresh and modernisation projects, while they await the new supply to come online. On completion of the current pipeline of office construction projects, we expect to see significant increase in large scale office relocation projects with clients moving to the new Grade A supply as well as the backfilling of their vacated existing premises by new tenants.

USD131 2.0% Security

AV

21.9%

IT Soft Cost Builder Works

USD74

M&E Works

20.2%

1.6%

USD54

3.3% 19.5%

1.7% 13.3%

18.3%

18.2%

4.8%

8.0%

21.8%

23.4% 25.4%

61

APAC FIT-OUT COST GUIDE

21.8%

21.9% 23.7%

10.0%

10.3%

Basic

Medium

8.9% High

Furniture

SOUTH-EAST ASIA COST ANALYSIS – JAKARTA JAKARTA Public transport continues to shape the real estate industry with the operational readiness of the Jakarta MRT. This has created new potential opportunities in the area. Phase II, scheduled for 2021, will strive to connect North Jakarta with the CBD. With further plans integration of several transport networks, we foresee further development in suburban locations.

In terms of office trends, co-working providers have been expanding rapidly in recent years and key absorption are held by new breed of entrepreneurs and start-ups seek different kind of office space.

The trend may change as this can also be a form of potential solution for multinationals and large domestic corporates seeking to inject flexibility into their current real estate assets while also improving the flexibility and collaboration.

USD162 1.3% 15.2%

Security

AV IT Soft Cost

USD108

12.8%

0.9%

5.6%

Builder Works M&E Works Furniture

11.4%

USD74 1.0% 8.3% 10.4%

9.8%

23.3%

7.8% 24.9%

9.6% 25.6%

25.7% 28.8% 30.5% 14.5% 10.1% Basic

16.4% Medium

16.2%

High CBRE PROJECT MANAGEMENT

62

SOUTH-EAST ASIA COST ANALYSIS – MANILA MANILA There is an influx of Chinese investors due to the government’s effort to have a stronger relationship.

Majority of the investments go to POGO (Philippine Offshore Gaming Operator). There is a sustained demand for BPO (Business Process Outsourcing) despite of upcoming second package of TRAIN (Tax Reform for Acceleration and Inclusion) Law because of climbing wages in the US. GARTH CHAPMAN Managing Director SEA Project Management +65 6229 1114 garth.chapman@cbre.com.sg

Other locations outside Metro Manila, such as Cebu, Davao, Bacolod, Clark and Iloilo, are progressive because of the Build, Build, Build Program of current administration. There is a boom expected for warehousing considering high demand in logistics market for online retailers.

USD132 1.9% 20.4%

1.3% 10.3% 14.3% 8.9%

1.3% 15.7% 15.0% 5.4%

Soft Cost

19.2% 3.5% 22.8%

24.5%

26.0% 28.1%

63

APAC FIT-OUT COST GUIDE

26.5%

AV IT

USD86 USD66

Security

22.8%

11.1%

11.6%

9.4%

Basic

Medium

High

Builder Works M&E Works Furniture

PACIFIC COST ANALYSIS – SYDNEY SYDNEY Public investment and consumption continue to support the overall NSW economy. Strong employment fundamentals and rental growth are observed in NSW. Supply pipeline is forecast to reduce in 2019 and coupled with increase in tenant demand, it results in strong support for rents.

We foresee thetrend of expansion of flexible workspace to continue beyond start-up businesses and entrepreneurs as evident by stronger traction with corporate users.

IAN REA Managing Director Pacific Project Management +61 2 9333 9102 ian.rea@cbre.com.au

USD254 1.0% 11.1%

Security

AV IT Soft Cost

USD170 0.6%

10.0% 8.7%

Builder Works M&E Works Furniture

8.3%

USD119 0.7% 5.9% 7.9%

7.6% 11.0%

26.4%

25.9%

13.7% 28.1%

27.3% 30.6% 31.7% 12.8% Basic

16.0% Medium

14.7%

High

CBRE PROJECT MANAGEMENT

64

PACIFIC COST ANALYSIS – MELBOURNE MELBOURNE Melbourne’s CBD has the lowest office vacancy of all Australian CBDs as observe that bulk of the new space being readily absorbed.

Small and medium occupiers are a major source of demand for CBD stock, with those in the technology, professional services and construction sectors particularly in need of office space. This continue to drive rental rates continue to rise.

IAN REA Managing Director Pacific Project Management +61 2 9333 9102 ian.rea@cbre.com.au

USD237 1.0%

Security

AV

11.8%

IT Soft Cost

USD160

Builder Works

10.7%

0.7% 8.8%

USD111

8.0%

0.8%

9.9%

6.3% 8.5%

Furniture

7.6%

26.8%

27.2%

15.2% 27.9% 30.5%

27.6%

29.5% 11.8% Basic

65

APAC FIT-OUT COST GUIDE

M&E Works

14.9%

14.5%

Medium

High

PACIFIC COST ANALYSIS – BRISBANE BRISBANE Despite a fall in housing construction, non-residential construction and business investment more than offset the declines. Government injection of funds are set to drive job creation and economic growth. Co-working groups were notably active in the leasing space with new deals concluded in market.

USD222 1.1% Security

12.6%

AV IT Soft Cost

USD150

11.4%

Builder Works M&E Works

0.6%

8.2%

Furniture

9.4%

USD104 0.8% 6.8% 9.1%

8.6% 9.8%

24.0%

26.0%

13.3% 27.0% 27.5% 29.3% 30.8% 11.7% Basic

16.3% Medium

15.7%

High

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PACIFIC COST ANALYSIS – PERTH PERTH Renewal activities noted in the resource sector is supporting an improvement in local office market. Perth office rents increased for the first time in 2013. Increases are expected to continue in the medium term, in line with increasing demand and tightening vacancy as the market continues its recovery. Limited supply in market will support absorption rate.

IAN REA Managing Director Pacific Project Management +61 2 9333 9102 ian.rea@cbre.com.au

USD243 1.0% Security

11.6%

AV IT

USD167 0.7%

10.4% 10.0%

8.4% 7.7%

USD109

13.3%

25.4%

0.8% 6.5% 8.6%

25.8%

14.3% 27.0% 26.9% 29.1% 28.6% 11.3% 14.3% Basic

67

APAC FIT-OUT COST GUIDE

15.0% Medium

14.6% High

Soft Cost Builder Works M&E Works Furniture

PACIFIC COST ANALYSIS – AUCKLAND AUCKLAND 2018 has reaffirmed the attractiveness of the Auckland property investment market with high liquidity, especially from offshore institutions. Prime vacancy decreased with several take-up of vacant space observed. With limited new supply and falling vacancy rates, we expect CBD rents to gently increase in 2019. Industrial space has demonstrated strong performance with new supply absorbed that maintained low vacancy rates and increased rentals rates.

USD232 1.1% 12.1%

Security

AV Soft Cost

10.9%

USD151 0.7%

IT Builder Works M&E Works

12.9%

Furniture

9.3% 8.5%

USD87

16.3%

1.0% 8.1% 10.8%

30.9%

18.4% 32.1%

27.3%

24.3% 24.5%

21.6% 8.0%

9.8%

Basic

Medium

11.4% High

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KEY CONTACT PJM GLOBAL LEADERSHIP AND PLATFORM SENG HAN LEE Associate Director t: +65 6328 7322 e: senghan.lee@cbre.com

ACKNOWLEDGEMENT PETER ANDREW Executive Director t: +65 6326 1677 e: peter.andrew@cbre.com.sg ADA CHOI Executive Director t: +65 6326 1204 e: ada.choi@cbre.com.hk CYNTHIA CHAN Associate Director t: +65 6326 1204 e: cynthia.chan@cbre.com.hk ANDREW GREEN Group Director t: +65 6326 1204 e: andrew.green@ptconsulting.com VICTOR P. MANINGO Director, Strategic Partnerships t: +63 917 834 3333 e: victor.maningo@haworth.com KENNETH LOCK Design Resource Consultant t: +65 8499 0512 e: kenneth.lock@haworth.com

DISCLAIMER 2020 CBRE Ltd has taken every care in the preparation of this report. The sources of information used are believed to be accurate and reliable, but no guarantee of accuracy or completeness can be given. Neither CBRE, nor any CBRE company, nor any director, representative or employee of CBRE company, accepts liability for any direct or consequential loss arising from the use of this document or its content. The information and opinions contained in this report are subject to change without notice.

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