press release

Report from Turner & Townsend reveals the impact of AI as the US, India, and Ireland see significant increases in costs.

A new report published today by the global programme management company Turner & Townsend reveals that a combination of a rise in demand for premium, highly amenitised Grade A office space and a shortfall in supply in many markets has led to double digit percentage increases in fit-out costs over the past year in major global cities including Miami, Dublin and Bangalore. The report also examines how the growth of AI is transforming the global fit-out landscape.  

While costs have risen across most markets, key cities in the US, India and Ireland in particular have seen prices increase dramatically. Fit out costs for premium space in New York have grown at 4% and the city now tops the table at $5,885.94 per m2. Covering 58 cities, Turner & Townsend’s report provides a uniquely comprehensive insight into the fit-out market globally.

A key driver of the increase in costs has been the changing role of the office and increased demand from occupiers for higher quality, more amenitised, and sustainable workspaces. With the normalisation of flexible working, businesses are working harder to encourage employees to come together, which means that an office now fundamentally needs to be more than just a place to work, it must be a home from home, a place to eat and drink, socialise, innovate, and bring people together. That means higher quality amenities, flexible spaces, and a more attractive overall fit-out.  

Furthermore, in a digitally-enabled world, the most forward-thinking businesses are trying to design spaces that not only enable employees to use AI, but also integrate technology into the very fabric of a workspace, to ensure the foundations are in place to capitalise as new breakthroughs are announced. All of this increases costs. For example, in many US cities occupiers are not just adding cafes and collaboration zones, amenities are themselves AI driven, with everything from the usage of specific services through to the management of climate control and lighting digitally tracked and synced up.

Across the majority of markets that have seen increases in costs, one constant is the acute shortage of Grade A space, as a lack of new supply, driven by fewer sites being brought forward for development and higher construction costs, is compounded by businesses reassessing their needs post-Covid. The report highlights how this combination of factors is leading to more businesses encountering the ‘stay vs go’ conundrum – deciding whether to pay high rates now in the market peak for new high quality space, invest in refurbishing existing facilities to stay long-term, or negotiate favourable rents to remain in the same space, despite it no longer suiting all needs.

Key findings from the report include: 

• A combination of high demand, a limited pool of top tier contractors, and limited inventory means New York has regained the top spot as the most expensive fit-out market globally, with average fit out costs rising 4% to USD $5,886 per m2 
• The pursuit of amenity-rich and AI-driven offices by leading tech companies has resulted in San Francisco and Los Angeles ranking as the fourth and sixth most expensive markets globally, and costs in Miami rose 11% to $4,323 per m2 
• As a result of its well-established economic position and strong demand across a range of sectors, average higher specification fit out costs in Dublin increased by a massive 12% to $3,878 per m2, pushing it up 10 spots in the rankings 
• London is the second most expensive market with high specification fit out costs sitting at $5,872 per m2, despite costs falling 1%, far higher than Edinburgh and Glasgow at $3,859 per m2, an increase of 12%, and Manchester at $3,666 per m2 
• Following increased international investment, demand for Grade A space in Tokyo is outstripping supply, leading to the cost of premium fit outs rising to $4,814 per m2, placing the city inside the top ten globally 
• With its occupier and fit out markets experiencing a relative lull following the recent political volatility, premium fit out costs in Hong Kong are on a par with secondary markets like Houston and Melbourne, although the importance placed on client-facing spaces means premium fit outs cost twice as much as lower specification spaces 

“Six years on from the start of the global pandemic, we’d like to imagine that its wounds have largely healed. Yet the impact on the world of business is enduring. Occupiers from major global players in financial, professional and legal services to tech behemoths and start-ups are all competing in an international market for talent and investment. They must have top-quality office space which reflects their brand and ambition – but stock is running short. 

“The Grade A capacity squeeze has intersected with a new world of heightened occupier demand and expectations. We’re seeing high-value requirements for amenities, welfare, and highly-scored building standards in connectivity and sustainability – all contributing to ever-rising costs for high-spec fit-outs. 

“Occupiers have a crucial decision to make and all options come with their own challenges. For example, demand for limited new, Grade A space is pushing up costs, while upgrading existing space can lead to disruption to business operations as renovations are made in situ. And in this new, digitally-enabled world, where AI is raising expectations when it comes to the integration of technology, the ideal refurbished space may come with significant costs beyond just the complicated logistical considerations. 

“Essential to making these decisions is engaging early, understanding the real world needs now and for the future, using strong strategic partners, building in flexibility, and balancing the value-cost relationship. Only by following these principles will companies make the right decision when it comes to the ‘stay vs go’ conundrum.”

Nadia de Klerk

Global Sector Sponsor and Head of UK Occupier & Portfolio

Turner & Townsend

The full report is available here.

Methodology

Turner & Townsend’s global office fit‑out cost guide brings together industry‑leading data and insight to show how workplace costs are shaped, structured and benchmarked across the world.  

The 2026 guide analyses 58 cities worldwide, providing construction costs across high, medium and low specification levels. It follows the same standardised test fit as used in previous years of approximately 4,294 m² across two floors to estimate the high, medium and low construction costs for a CAT A and CAT B fit out.