Press Release: Contractor Confidence Rises Amid Strengthening Office Demand Across Asia Pacific

Why It Matters

The uplift in contractor sentiment and tightening supply signal a turning point for APAC office real estate, boosting investor confidence and prompting occupiers to prioritize flexible, cost‑efficient fit‑out solutions.

Key Takeaways

• 70% contractors expect improved 2026 conditions.
• Office absorption hit 92M sq ft in 2025.
• Fit‑out costs rise in Tokyo, Taipei; fall in Shenzhen, Seoul.
• Supply pipeline tightens outside India, boosting vacancy pressure.
• Backlogs average six months, stabilizing delivery timelines.

Pulse Analysis

The resurgence of contractor confidence in Asia Pacific reflects a broader recovery in office demand after a resilient 2025. Seventy percent of respondents to Cushman & Wakefield’s annual Contractor Sentiment Survey anticipate improved market conditions, buoyed by an unexpected 92 million square feet of office space absorbed last year. Shorter backlogs—averaging six months—suggest that project pipelines are clearing, allowing developers to accelerate delivery and occupiers to secure space more efficiently. This sentiment shift aligns with a gradual return of business confidence across the region.

Fit‑out cost dynamics are diverging sharply by city, underscoring localized market pressures. Tokyo’s per‑square‑foot cost jumped to $215 from $195, and Taipei rose to $145 from $110, driven by rising labour and material prices. Conversely, Shenzhen and Seoul saw declines, easing to $87 and $130 respectively, as regional cost pressures ease. Singapore and Hong Kong remained steady, while India continues to offer the most competitive rates at $65‑$73 per square foot. These variations compel occupiers to adopt flexible design strategies, prioritize sustainable materials, and leverage smart‑building technologies to manage budgets without sacrificing quality.

Outside India, the development pipeline has contracted sharply, tightening supply of premium office space and pressuring vacancy rates downward in core CBDs. This scarcity is prompting a flight to quality, with tenants seeking flexible, high‑performance environments that can adapt to evolving workforce patterns. Investors are likely to favor assets in markets with stable demand and controlled cost structures, while developers may focus on value‑driven fit‑out approaches that balance cost efficiency with sustainability. As the region moves into a more stable phase in 2026, the interplay of confidence, cost, and supply will shape the next wave of office investment and design innovation.