Consequences of current energy shortages difficult to predict
- Fit Out Cost Guide 2026 analyses 53 markets
- Labour and material costs remain the key cost drivers
- Contractors nevertheless remain largely optimistic about the future
The European office market proved resilient in 2025 despite geopolitical and economic uncertainties. According to research by Cushman & Wakefield, around 10.5 million m² of office space was newly let – a decline of three per cent compared with the previous year’s volume. High-quality buildings in prime locations remain particularly in demand, with their letting volume increasing by eight per cent.
Cushman & Wakefield’s new “Fit Out Cost Guide EMEA Office 2026” provides guidance on fit-out and refurbishment costs, once again analysing trends across 53 cities in Europe, the Middle East and Africa (EMEA).* The average fit-out costs identified in the study rose by around 3.8 per cent across the EMEA region, a significantly more moderate increase than in previous years.
Martin Wellnitz, Head of Project & Development Services DACH at Cushman & Wakefield, comments on the latest study whilst also referring to current global political developments stemming from the war in the Middle East and its consequences:
“Based on the findings of the Fit-Out Cost Guide 2026, we are observing a stabilisation of construction costs at a high level, in line with the general rise in costs. For businesses, this means being able to benefit from timely planning of stabilised supply chains and improved availability. It is not yet possible to adequately assess whether the conflicts in the Middle East will have a noticeable impact on the construction industry, which has already been battered in recent years. What is certain, however, is that uncertainty among companies regarding the office space they occupy could increase and, in many respects, influence the ‘stay or leave’ decision.” Wellnitz adds: “According to the Cushman & Wakefield study, labour costs remain the primary cost driver in any case. At the same time, our Contractor Sentiment Survey shows that contractors – at least before the start of the Iran war – were once again looking to the future with greater optimism. This could have contributed to planning certainty – provided that tenants and landlords were able to coordinate their requirements early on and with precision.”
Germany remains among Europe’s most expensive markets
The four top German locations Berlin, Frankfurt, Munich and Hamburg continue to fall within a narrow cost range. According to the findings of the Fit-Out Cost Guide, the costs for average-quality office fit-outs range between €2,333 and €2,512 per m², with Berlin at the lower end and Hamburg at the upper end. This means that German cities remain clearly in the upper price segment in an EMEA comparison – for medium-standard fit-outs, they are surpassed only by London at €2,668 per m². Demolition costs also remain high, standing uniformly at €208 per m² in all four German cities surveyed.
EMEA-wide cost trends
The Fit Out Cost Guide 2026 shows the following average changes compared to last year’s survey: whilst office fit-out costs for the basic fit-out standard rose only minimally, by 0.5 per cent, the medium fit-out standard already shows an increase of 3.8 per cent.
In the high-standard segment, fit-out costs have even risen by 4 per cent. Demolition costs recorded a higher percentage increase, rising by 3.7 per cent for high standards, 5.1 per cent for medium standards and 5.7 per cent for the ‘basic’ standard.
Martin Wellnitz puts this development into perspective: “The markets have gone through a complex cycle. It is now becoming apparent that project durations are stabilising and supply chains are functioning more reliably again. Nevertheless, companies must continue to factor in moderate cost increases.”
Cushman & Wakefield’s Contractor Sentiment Survey: Labour and material costs continue to rise
A key component of the Fit-Out Cost Guide survey is the “Contractor Sentiment Survey”, which gauges construction firms’ views on the future trajectory of overall conditions in the construction industry.
The results of this year’s survey indicate that contractors still need to carefully manage cost pressures. On a general level, opinions are relatively evenly split as to whether contractors will keep their prices stable in the near future (39%) or raise them slightly (57%), suggesting that the current upward pressure of around 4% per year is likely to persist.
Martin Wellnitz: “It is clear that margin pressure lies at the heart of this dilemma: contractors must pass on price adjustments from their supply chains directly to their customers in order to remain economically viable, given the generally low margins in the construction industry.”
Some further findings from the Contractor Sentiment Survey:
- 78 per cent of contractors expect rising material costs.
- 80 per cent expect rising labour costs (in 8 out of 13 markets).
- 66 per cent anticipate higher prices from their suppliers.
- 60 per cent of contractors expect market conditions to improve.
Expectations of price rises are particularly strong in Spain, Poland, the Czech Republic and Slovakia, where over 75 per cent of respondents anticipate higher net purchase prices. In Germany, by contrast, only 14 per cent expect rising purchase prices – at the start of 2026, this is still an indication of a stabilising market situation.
Wellnitz concludes: “Planning tailored to needs and users, and high-quality execution, are more important than ever. Only in this way can the deployment of capital, materials and personnel contribute to sustainable value retention and user satisfaction. Well-considered investments in technology, sustainability and flexible working environments pay off in the long term – for both owners and users.”
*The survey was conducted between early January and mid-February 2026.
