The cost of fitting out high specification commercial space in London is higher than anywhere in the world, according to a new report from Turner & Townsend.

The global professional services firm points to three critical factors driving prices in the capital – high material costs, specialist skill shortages and a race for quality workspaces to attract workers back to the office.

The Global Occupier Fit-Out Report 2025 analyses and breaks down fit-out costs across 50 global locations. It shows that in London the average high specification project cost is £4,671 ($5,932) per sqm. The second most expensive location is New York on £4,470 ($5,677) per sqm, followed by Zurich (£4,299/$5,460 per sqm) and San Francisco (£4,293/$5,452 per sqm).

The new data identifies the demand for specialist facilities and quality services as key factors helping drive up costs – with occupiers seeking the latest audio-visual technology, premium mechanical, engineering and plumbing (MEP), and more sustainable design and operation. It notes that fees for specialist skills in areas such as these are around double the equivalent cost in New York. Increased building safety regulations, traditional design approaches and the ongoing shortage of specialist skills such as Chartered Fire Engineers, are driving this cost spike in London, specifically in high rise and high-profile buildings.

The findings align with Turner & Townsend’s International Construction Market Survey (ICMS) in 2024, which assessed overall construction costs globally. While New York, San Francisco and Zurich were the top three most expensive markets, London ranked only 10th in light of its basic cost of construction being significantly lower than the other three.

Beyond the cost rankings, the new research analyses the key international trends in the market, including the impact of the return to the office, rising demand for premium environments, and the global reorganisation of office portfolios to drive value, such as reshoring space to fast-growing emerging economies such as India, Mexico and Malaysia.

Nadia de Klerk, Global Head of Occupier and Retail, at Turner & Townsend, said:
“In London we are seeing a perfect storm. The gathering pace of return to office working, coupled with skilled trades shortages and high building material prices, have resulted in commercial fit-out costs being the world’s most expensive.

“The knock-on effect in the push for premium fit-out space is creating even greater demand for specialist skills, from MEP and sustainability to digital expertise, and this is likely to keep costs high.

“Given these pressures, alongside other geopolitical headwinds, it’s more important than ever that real estate teams around the world arm themselves with data and insight. This is essential for horizon scanning, and evidence-backed decision making, not to mention accurate benchmarking of fit-out projects to inform investment.”