Geopolitical tensions and AI demands drive global office fit-out costs up 6%

Strategic planning and procurement are crucial to mitigate risk

The report highlights that organizations can no longer treat cost management as a static exercise. With 88% of CRE leaders identifying energy savings as a top C-suite priority, the guide emphasizes a shift toward viewing smart M&E solutions as long-term operational investments rather than simple cost lines. Furthermore, the growing complexity of technology, from premium AV systems for hybrid work to the underlying infrastructure needed for AI, is becoming a baseline requirement that must be budgeted for from day one.

"In the current market environment, adopting a passive stance carries significant financial risk," said Ben Jackson, Global Head of Development Services, Project and Development Services, JLL. "Early-stage risk mitigation has become essential to project success. We recommend clients integrate cost consultancy services from project inception to rigorously validate budget assumptions and execute strategic procurement strategies for critical long-lead components, particularly sophisticated mechanical and electrical systems. Establishing fixed-price contractual commitments as early as possible in the project, provides essential protection against supply chain volatility driven by energy market fluctuations and broader geopolitical uncertainties."

North America remains most expensive region, driven by tariffs and labor scarcity

Regionally, North America remains the most expensive market for fit-outs, with an average cost of $3,200 per square meter / $295 per square foot, significantly higher than Asia Pacific ($1,550/sqm), Latin America ($1,800/sqm), and EMEA ($2,300/sqm). The report identifies New York, San Francisco and Boston among the top five most expensive cities globally, with costs driven by broad economic conditions and intense competition for skilled labor. The findings also reveal that choosing an office layout typology is a major cost determinant, with the potential to vary project costs by 10%-13% before accounting for quality of finishes.

"North America continues to see elevated fit-out costs, influenced by ongoing trade tariffs and a shortage of skilled labor, particularly in mechanical and electrical trades," said Daniel Pomfrett, Managing Director, Cost Management for the Americas, Project and Development Services, JLL. "In major markets such as New York and San Francisco, strategic decisions around typology and specification have become increasingly important, as these choices can influence project costs by over 25%. Organizations should prioritize smart investments in technology and energy efficiency to create high-performance workplaces that deliver strong value for the capital investment."

Sustainability demand is highest in EMEA, where ESG mandates and regulations are deeply embedded, making energy-efficient specifications and certified materials a standard requirement rather than a premium addition to project budgets. While APAC includes premium global hubs like Tokyo and Singapore, it is the most cost-effective region for fit-outs and offers many of the world's most affordable markets. Technology costs are a particular concern in APAC, which is acutely affected by semiconductor and chip shortages that are driving up the price of AV, security and smart building systems.

JLL Project and Development Services is a leader in the advisory, design, management and delivery of commercial real estate projects for the world's most prominent corporations, educational institutions, public jurisdictions, healthcare organizations, industrial facilities, retailers, hotels, sports facilities and real estate owners. JLL's project management team comprises 9,300 project managers across 80 countries with $87.4 billion in projects managed annually. JLL's design teams consist of 600+ designers across 65 studios in over 30 countries, to service clients with end-to-end design solutions. Visit to learn more.

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About JLL

JLL (NYSE:JLL) is a leading global commercial real estate services and investment management company with annual revenue of $26.1 billion, operations in over 80 countries and a global workforce of more than 113,000 as of December 31, 2025. For over 200 years, clients have trusted JLL, a Fortune 500^® company, to help them confidently buy, build, occupy, manage and invest across a variety of industries and property types, including office, industrial, hotel, multi-family, retail and data center properties. Driven by our purpose to shape the future of real estate for a better world, we help our clients, people and communities SEE A BRIGHTER WAY. Powered by rich global datasets and leading technology capabilities, we provide coordinated, end-to-end delivery of real estate services for a broad range of global clients who represent a wide variety of industries. Through LaSalle Investment Management, we invest for clients on a global basis in both private assets and publicly traded real estate securities. For further information, visit jll.com.