As businesses around the world recalibrate hybrid work strategies to favour in-person collaboration, the office sector is once again taking centre stage in commercial real estate, says JLL.

This resurgence, however, comes at a significant cost — particularly in North America. According to a new JLL report, office fit-out costs in the U.S. and Canada are now the highest globally. (Fit-out refers to the process of converting unfinished interior spaces into useable premises.)

JLL’s Global Office Fit-Out Costs Guide 2025, released today, offers a comprehensive look into average office fit-out expenses based on data from 68 cities across 40 countries. The findings highlight growing global demand for redesigned office spaces, with 59% of organizations planning to increase investment in office design and fit-outs over the next five years.

“Five years following the start of the global pandemic, we continue to see the evolution and growing momentum toward the office sector,” said Cynthia Kantor, JLL Canada’s head of project and development services. “As companies more frequently adapt their hybrid policies to favour greater in-office attendance, at JLL, we help our clients identify and create high-quality, sustainable spaces that support the wellbeing and productivity of their workforce.”

North America Leads in Office Fit-Out Spending

Fit-out costs have increased in all regions over the past year, with North America commanding a substantial premium. The region’s average fit-out cost is US$3,070 per square metre (US$285.22 per square foot) — far surpassing the global average of US$1,830 per square metre (US$170 psf.) In contrast, Latin America averages US$1,790 per square metre (US$166.31 psf), while Europe, the Middle East, and Africa sit at US$1,970 per square metre (US$183.05 psf.) Asia-Pacific remains the most affordable region, with an average cost of US$1,460 per square metre (US$135.63.)

North American cities dominate the rankings of the 20 most expensive global markets for office fit-outs, alongside high-cost hubs such as Vancouver, Tokyo, London and Dubai. Conversely, cities in India, South Africa, Vietnam and China remain among the most cost-effective, despite rapid growth and increasing construction activity.

Rising Costs and Economic Pressures

The report links rising office fit-out costs to inflation, labour shortages, and volatile material prices. JLL found that 75% of markets have seen raw material price increases in the past year, while half reported labour shortages — both contributing significantly to construction and delivery delays.

To assist companies in navigating this complex environment, JLL developed a nine-point pricing matrix covering different office layouts and quality levels. Builder works — or core construction — represent the largest portion of fit-out budgets globally, accounting for 37% of total costs. Mechanical and electrical (M&E) services follow, representing between 20% to 45% of project spending depending on the region.

Interestingly, no Canadian cities rank among the world’s top 15 in M&E costs.

Sustainability a Growing Priority

An increasing number of companies are prioritizing sustainability in their office designs. According to the report, 60% of surveyed markets have seen greater demand for sustainable fit-outs over the past year. JLL’s previous Future of Work research supports this trend, revealing that two-thirds of global firms intend to boost investment in sustainability over the next five years, the company noted.

Investing in M&E upgrades is seen as a key strategy, with such services making up around 29% of sustainable fit-out costs globally — and up to 50% in some regions. While the upfront costs may be high, energy-efficient systems can lead to long-term operational savings of 10% to 40%.

Early engagement with sustainability experts, JLL advises, can ensure that green targets are integrated from the outset, minimizing costly last-minute changes.

Looking Ahead: Challenges and Cautious Optimism

Despite signs of optimism, the road ahead is not without its challenges.

“Import tariffs withe the U.S. [are] anticipated to disproportionately impact Canadian firms and disrupt construction,” says JLL in the report.

“Import-reliant inputs may also be affected by [the] weaker Canadian dollar.”

Labour constraints, supply-chain disruptions, and political instability continue to impact project delivery timelines and budgets as the trade policies and tariffs loom as potential disruptors.

Ruth Hynes, JLL’s director of work dynamics research and strategy for Europe, the Middle East and Africa, Director of Reserch & Strategy, Work Dynamics EMEA, stressed the importance of looking ahead strategically.

“The global office sector faces a complex landscape of challenges and opportunities in 2025,” said Hynes, who co-authored the report. “As corporate clients grow and expand their footprints, we anticipate the office construction will remain active even amid market uncertainty, and encourage early, strategic planning to ensure the success of fit out initiatives.”

In a world still adapting to post-pandemic norms, the demand for smarter, healthier, and more sustainable office spaces appears stronger than ever — even if it comes with a steeper price tag.

Photo: JLL

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