What is the Cost of an Office Fit Out?
Every year, we have hundreds of companies reaching out to us for a quote for their office fit out. They may have outgrown their existing space or have been told by their landlord they need to move out. Many of them at the moment are looking to move to a new location to support their switch to a hybrid working model. Ultimately, they’re looking for an initial idea of how much their project will cost.
The costs we provide are often a shock to these companies. They struggle to see how their project could possibly cost as much as £100,000, or £1,000,000, or whatever the cost happens to be. At Zentura, we’ve had experience on hundreds of office fit out projects over the last 3 decades. For many of these, we've helped them to define their brief and budget.
If you’re just starting your research, we understand that this can be overwhelming. It’s a big project, coming in at a large cost, and the possibility of it going wrong could be disastrous for your entire business. In this article, we’ll explain the factors that affect the cost of your office fit out, why some companies are more expensive than others, and what you can expect to pay for your office fit out.
What Affects the Cost of an Office Fit Out?
Every business is different, and so is every office. There are hundreds of things that can drive the cost up or help work it down. There are 5 key factors that will control the cost of your fit out project: size, specification, services, state, and setting. Here, we’ll break down each of these factors and how they can affect the cost of your project.
Size is the one factor that will have the most impact on the cost of your office fit out project. This is not surprising, as many contractors calculate their quote based on the quantity of materials the design calls for. Labour is then factored into that unit cost. This is why smaller projects seem very expensive, as the labour element of the quote is far higher relative to its overall size.
So how much space do you need? That depends on your specific requirements but guidelines recommend a minimum of 180 to 200sq/ft per person. This includes common spaces such as breakout areas, meeting suites, and teapoints. However, you may need to look at your company’s growth plans when calculating your space requirements. You don’t want to have to move in 2 or 3 years because you’ve run out of space.
The specification is almost as important as size when it comes to your office fit out costs. As mentioned earlier, a high specification workspace can cost more than twice as much per sq./ft as a basic design. Upgrading the materials in your workspace will come at a cost, but often is a worthy investment. More expensive furnishings tend to be much more ergonomic, acoustic, and durable. These qualities will help your people to be more productive every day, and last you years into the future.
While basic office fit outs are functional and adequate, their design tends to lack inspiration. This may not be noticeable on a day to day basis, but without a stimulating environment, the engagement and performance levels of staff will drop. On the other hand, many design features may look “cool” but serve no real purpose, so it’s important to consider what you are trying to achieve. Ultimately, there is no ‘right’ specification- it's what is best for you and your staff.
Another element that can increase the cost of your project is the condition of the building. Older buildings with solid walls and floors are much more complex to alter, and the cost increases as a result. More modern buildings with features such as raised access flooring and easy access are much simpler to work in. In this situation, the costs will decrease.
In addition to a higher initial cost, buildings in poor condition are at a much higher risk of discovering complex problems with the building during the project. There may even be structural issues. Whether they are the responsibility of you or your landlord, these will be time-consuming and expensive to resolve.
Much like the structural state of your new workspace, the condition of the services can add unexpected costs to your office fit out quote. The power& data, lighting, fire safety, air conditioning and plumbing systems are all invisible. If they are in poor condition, they may require extensive remedial works before you can begin other works. Systems such as air conditioning and sprinklers are particularly expensive to adapt, as they require a lot of labour-intensive reconfiguration and re-commissioning.
However, a modern building will not always mean reduced system adaption costs. Many of the newest buildings have complex building management systems that need specialist contractors, driving up the cost. Some cost in this area is unavoidable, but involving a fit out company to assess the space before you sign the lease will enable them to check the systems and avoid costly errors. Interior design can also be planned to minimise the most expensive alterations to systems.
The final element that will have an impact on the cost of your office is the location. While this will vary less than the actual cost of your lease, elements such as local labour costs and demand can increase the cost of your office fit out. In urban areas, especially London, labour costs are much higher than in some other parts of the country.
The amount of office construction in cities means there is high demand. Many companies are also adapting their workspaces to enable hybrid working. Access can also play a part in the costs – in areas such as central London, the delivery of materials is difficult. This means fit out companies will have to allow for this in their quote.
Why are some Office Fit Out companies more expensive?
Comparing quotes from office fit out companies is notoriously difficult. Most of the time, you are comparing 3 or more completely different designs, and the costs can vary wildly. Even if you choose a paid design package and then send out a tender, the quotes are rarely similar. This is because in addition to the design differences, office fit out companies have different cost structures, and as a result, different costs- even for the same project.
Many of the largest office fit out companies have multiple city centre offices and showrooms, and many in-house capabilities- from design to compliance. This means their overheads are much higher. Their complexity and bureaucracy will lead to a far less customised experience for your company. However, these companies have significant buying power and access to resources, especially talent such as interior design.
On the other hand, smaller fit out firms provide a more flexible, agile approach. While less systematised, they provide a more personal experience for your company. They subcontract more works and have lower overheads. However, they may not have the experience or internal resources to handle particularly large projects over 50,000 Sq/ft.
One of the most variable elements between different fit out companies is their designs. This changes from company to company depending on the experience and expertise of their design team. Large companies often have several in-house designers with different expertise. Many internal designers have their own preferred styles and features that they will include in their designs frequently, so it’s important to get a range of designs.
Some companies, like Zentura, prevent this by outsourcing design to a variety of expert interior designers, providing a wide degree of flexibility. This means that the design is far more focussed on your needs as a company.
The third and final way in which your different quotes will vary a lot is the sourcing. Design items, especially furniture, can vary significantly in cost, and designers build up relationships and preferable terms with certain suppliers. This means that you will rarely see similar design packages. However, forcing all suppliers to quote on the same scope will result in significant cost rises, as they may not have preferential rates with the suppliers that you choose- extra costs which will likely get passed on to you.
Subcontractors can also impact the cost of your project. Highly capable and qualified contractors will have a higher level of workmanship which will cost more. This is very difficult to tell from the quote, but ensuring that all the contractors are qualified, and carrying out a careful snagging process at the end will help to ensure you get the quality of work you deserve.
Office Fit Out Costs 2022
An office fit out is a very complex project, but based on office fit out projects we’ve carried out recently, most office fit outs will range from £40 to £85 per square foot. This means that for a 5,000sq/ft space, a basic fit out would cost around £1500,000, and a mid-spec about £225,000. A cutting-edge space of the same size could cost £425,000 or more.
While it can be uncomfortable to see a figure that large at the bottom of your quote, it’s also important to consider the return on the investment you’re making. If your new office helps to make your people even just 2-3% more productive, your initial outlay will be repaid multiple times over the course of your lease.
As you can see, there are many different factors that can affect the cost of your office fit out. The two most important are size and specification. These will control, to a large extent, what you need to invest in your workspace.
At Zentura, we provide a concept to completion office fit out service, from initial consultancy through the design and project management stages. As specialists in fast track office fit out in occupied buildings, our team are highly experienced in delivering fit out projects on time and on budget with minimal disruption to you or those around you.