Office fit-out costs across India increase slightly, up 4.5% Year-on-Year: JLL

Mumbai, February 21 2024:  The cost to fit-out workplaces in India continues to rise, mirroring ongoing inflationary pressures, higher commodity prices and increased construction costs. According to global real estate consultant JLL’s (NYSE:JLL) Asia Pacific Fit-Out Cost Guide 2023/2024, the average cost to fit-out workplaces with medium specification across India increased by 4.5% with the average fit-out cost per sq ft rising to INR 5,788 from INR 5,546 last year. Mumbai continues to be the most expensive city in India for office fit outs at an average of INR 6,588 per sq ft followed by New Delhi at INR 6,068 per sq ft. 

In the Asia Pacific, despite regional differences, we see that the inflation levels are starting to stabilize. This trend mirrors the recent news of the worldwide economy, where inflation is gradually reaching the closer target and economic growth has been better than expected. JLL’s APAC fit-out guide details the nuances of cost variations across the regions, mapping construction price shift, outlook for capital procurement activities, strong client sentiment and ESG commitments gaining prominence.
“In 2023, a year marked by global headwinds, the annual numbers for gross leasing in India’s top seven markets crossed the significant 60 million sq ft milestone for the very first time. This solidifies India’s position and firmly establish its credentials as the ‘office to the world. We anticipate this momentum for Grade A office demand to continue in 2024 with new entrants to the country, especially in the GCC and new tech sectors. Despite a 4 to 5% rise in construction prices, there is confidence within the India market as flight-to-quality remains a theme. India’s supply-chain performance has improved significantly over the last two year, coping better to the global disruption, and varying regulatory frameworks. Largely, input costs have decreased due to reduced global raw material prices, however increasing labour costs remains set on an upward trajectory. This industry is also making efforts to modernise and streamline the supply chain to enhance efficiency and competitiveness. And with average fit-out cost across all 7 major cities remaining much below the regional average, it makes India a strong market for global companies and investors” said James Jipu Jose, Managing Director, Project & Development Services (PDS), India, JLL.

 “Our clients continue to remain bullish despite the continuing impact of price inflation, and our teams report robust pipelines. There is a renewed focus by clients to attract staff back to the office, improve productivity and well-being, and meet net zero carbon (NZC) commitments,” James added.

“While inflation in Asia Pacific markets is returning to normal levels as widely projected, certain supply chain challenges remain for mechanical, engineering and plumbing, information technology and audio-visual items. Going forward, we foresee factors like commodity prices, energy costs, and wage increases continue to impact pricing, lead to delays for some fit-outs and unpredictability of selection items into Asia Pacific,” said Martin Hinge, Executive Managing Director, Project Development Services, JLL Asia Pacific.