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Commercial investors to save on office costs in mid-sized capitals
According to Knight Frank’s Fit-Out Cost Guide 2026, while Brisbane and Perth were the most affordable markets for office fixtures in Australia, they still ranked among the top 10 most expensive capital cities in the Asia-Pacific (APAC) region.
The report found the average cost per square metre for a fit-out in Perth and Brisbane was $934, making them the most affordable in the country.
On the other hand, Sydney and Melbourne were the most expensive capitals in Australia for office fit-outs, at an average of $1,334 and $1,300.
Findings showed that Singapore’s commercial market ranked as the most expensive amongst the APAC region, with office fit-outs costing more than $2,000 per square metre.
Additionally, the guide revealed that prices were set to rise by between 2 per cent and 5 per cent over the next 12 months, driven by tightening labour markets, sustainability, and global trade uncertainty.
Knight Frank Australia national head of project management Mark Blinco said the fit-out costs in Australasia were indicative of an office market with pricing shaped by labour and expectations.
“The Australian market is at very different points in its cycle depending on what capital city you look at,” Blinco said.
“We have Sydney, where fit-out costs remain high and will likely continue to grow due to labour and material cost pressures, but also softer markets like Brisbane and Perth, where costs remain steady but are overall more manageable, even with infrastructure booms underway for the Olympics in 2032.”
Blinco said that Melbourne’s office market was still feeling the effects of the city’s COVID-19 shutdowns and changes to office mandates, which had kept fit-out prices high.
Knight Frank head of project management – Queensland, Paul Kennedy, said that Brisbane remained an attractive location for buyers seeking office space.
“Brisbane’s average fit-out cost places it below Sydney and Melbourne, keeping the city attractive for occupiers managing capital budgets; however, broader construction cost escalation is unavoidable,” Kennedy said.
“Labour shortages reinforce this pressure. Queensland faces a construction workforce shortfall peaking near 50,000 workers in 2026–27, elevating risks of delays and cost overruns.”
Knight Frank head of global portfolio solutions, APAC, Francesco Demarco, said the challenge for occupiers is no longer controlling fit-out costs, but understanding why costs are rising and what it means for long-term strategy.
“The return on capital investment is increasingly harder to justify.”
“Labour constraints, sustainability compliance, and trade-related material pressures are structural; they will not resolve quickly.”
“Therefore, the smart approach is to integrate fit-out planning into broader portfolio decisions from the outset, aligning specification levels with business requirements, and using cross-market cost data to make more informed capital investment decisions," Demarco concluded.