Americas Fit-Out Cost Guide 2022

“…the Dodge Momentum Index suggests that the construction sector continues to weather the storm of higher material prices and labor scarcity and is looking past the pandemic’s unique issues for projects like schools and offices. As the pipeline of projects awaiting groundbreaking fills, a more even and pronounced recovery in construction starts will take hold.” – Dodge Data & Analytics 6 CONSTRUCTION ACTIVITY Despite the cost, material and labor challenges, commercial construction activity remains elevated. The new construction starts index from Dodge Data & Analytics increased by 5.4% in 2021. 5 Residential construction starts continued at record highs, exceeding pre-pandemic levels, thereby creating competition for building materials in the sector. Much of the non-residential building momentum is driven by booming demand in the tight industrial market across the Americas. Office construction, however, also remains elevated. Between the U.S. and Canada, office space under construction did decline by 19% in 2021. However, the current pipeline of 118 msf remains 43% or 36 msf above the 20-year historical average.

KEY TAKEAWAY Occupiers have been targeting attendance. As office space usage increases, we expect organizations will expand their piloting and testing of different types of layouts related to hybrid work. This is likely to increase the amount the first half of 2022 for employees to return to a regular cadence of office

of fit out and office space construction activity in the coming quarters, creating even more demand for materials and labor.

NEW CONSTRUCTION STARTS ACCELERATED IN 2021 Value of New Construction Starts: Non-Residential Buildings, 12-Month Trailing Average

NORTH AMERICAN CONSTRUCTION PIPELINE DOWN 19% YEAR-OVER-YEAR Office: Under Construction as % of Inventory

5%

$125,000 $150,000 $175,000 $200,000 $225,000 $250,000 $275,000 $300,000 $325,000 $350,000 Millions USD, SAAR

4%

2021 Q4, 3.5%

3%

2%

2021 Q4, 1.8%

1%

0%

Canada

United States

Source: Cushman & Wakefield Research

Source: Dodge Data & Analytics: New Construction Starts Report

6 AMERICAS OFFICE FIT-OUT COST GUIDE 2022