Việt Nam retains cost competitiveness amidst regional challenges: JLL report

Việt Nam retains cost competitiveness amidst regional challenges: JLL report

Against a backdrop of escalating office fit-out expenses across the Asia Pacific region, Việt Nam stands out as one of the most economically viable markets, offering an appealing balance of quality and cost efficiency.

Office buildings in HCM City. HCM City maintains a competitive edge concerning office fit-out costs in the region. — Photo doanhnghieptiepthi.vn

Against a backdrop of escalating office fit-out expenses across the Asia Pacific region, Việt Nam stands out as one of the most economically viable markets, offering an appealing balance of quality and cost efficiency, as per the latest announcement by JLL.

The recent release of JLL's APAC Office Fit-Out Costs Guide sheds light on the intricate cost dynamics, currency fluctuations, and the burgeoning demand for robust, high-performance workspaces.

The report underscores that office fit-out costs are on the uptrend continent-wide, propelled by labour shortages, surging material prices, and the mounting intricacy of mechanical, electrical and technology systems. 

Geopolitical uncertainties have become a major cost risk, as ongoing conflicts in the Middle East and related supply disruptions continue to fuel volatility in global energy markets, particularly for Asia-Pacific economies dependent on imported energy, petrochemicals and energy-intensive materials.

Despite these challenges, HCM City maintains a competitive edge concerning office fit-out costs in the region, with an average cost of US$1,150 per square metre for medium-quality corporate offices—significantly lower by 26 per cent compared to the regional average of $1,550 per sq.m. 

This cost advantage places HCM City favourably against developed markets like Singapore ($2,400 per sq.m), Tokyo ($2,500 per sq.m), Seoul ($1,850 per sq.m), and major Australian cities averaging $2,000 per sq.m.

Nonetheless, the report highlights that this cost competitiveness is under pressure from various fronts. 

The depreciation of the Vietnamese đồng by 2.8 per cent against the US dollar over the last year has substantially raised the costs of imported mechanical and electrical equipment, technology systems, and premium finishes, predominantly sourced internationally, in local currency terms.

This poses substantial challenges for multinational corporations in budget management, necessitating a dual-currency analysis in both US dollars and Vietnamese đồng.

Furthermore, Việt Nam's market faces a scarcity of specialised technical labour, specifically in fields such as electricians, heating, ventilation, air conditioning (HVAC) specialists and M&E installers – a trend prevalent across the Asia Pacific region.

The escalating labour costs, prolonged delivery timelines and heightened competition from large-scale projects in infrastructure, data centres and industrial sectors are exerting further pressures on the market.

In 2026, companies are not just fitting out offices, they are building talent magnets and operational buffers. Workplace performance is now a strategic asset to leverage for long-term productivity, according to Stephanie Đinh, head of project & development services, JLL Vietnam. 

"While Việt Nam continues to offer strong cost competitiveness in the region, we're advising clients to adopt more sophisticated procurement strategies that account for currency risk, supply chain diversification, and early contractor engagement,” Đinh said.

JLL's report highlights the challenge in the region including increasing fit-out costs due to labour constraints, risk pricing and contractor margins. 

In addition, currency movements are creating significant cost distortions, forcing contractors to adjust risk premiums. The research underscores that multinational occupiers require dual-currency analysis and locally informed procurement strategies to avoid budget miscalculations.

Some 88 per cent of Asia Pacific markets report increased sustainable fit-out enquiries, with 46 per cent of organisations actively reducing energy consumption. 

Occupiers are prioritising high-performance, technology-enabled workplaces as risk-management strategies rather than discretionary enhancements, making early cost planning and locally informed decision-making critical.

“Organisations that integrate strategic cost planning and local market intelligence at concept stage are better positioned to manage these pressures and deliver projects on budget.

“The key is understanding that lowest initial cost doesn't always translate to best long-term value—particularly when factoring in workplace performance, sustainability and operational efficiency,” Đinh said.

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