Office Refurbishment Cost
Every week, we help numerous companies plan, design and deliver office refurbishments. For many of these companies, one of their first questions is “what will my office refurbishment cost?” In many cases, the work they need costs more than their budget, which creates a difficult situation. They have to go back to their management team and ask for more funds or reduce the scope of the work to bring within their budget. Both are difficult and frustrating.
In many cases, underbudgeting is not because you haven’t got the available funds. It’s because you find it difficult to estimate what your works will cost. You may also struggle to prove the value of the refurbishment to your management. It’s important you have an idea of what you are prepared to spend before you reach out to potential design & build companies. This will make sure you are keeping focussed on what is right for your business.
In this article, we’ll explain the simple 4 step process you can use to make sure you set an office refurbishment budget that is right for your company. We’ll cover how to set your office refurbishment brief, estimate costs, and establish a business case for your project.
Set Your Brief
When you or your leadership team decide that you need a refurbishment, it can be tempting to create a wish list of design ideas straightaway. However tempting this may be, it’s important you don’t do this, as it would rapidly turn your project into a disorganised nightmare.
To ensure your office refurbishment is the success you need it to be, you need to start with the “why”. Why do we need to do an office refurbishment? What is wrong with our office at the moment? How will our project improve that?
Carefully defining the business problem(s) that your refurbishment is going to solve will set your project up for success. If you don’t get this stage right, your office refurbishment is guaranteed to be a failure. You will never be able to solve your most damaging workspace issues.
There are a number of common reasons for carrying out an office refurbishment, such as:
Many companies have grown or contracted sharply due to economic volatility in the last 3 years. Adjusting to changing staff counts is one of the most common reasons for office projects.
Brands and cultures evolve over time. While your office may have reflected your company 5 years ago, it may well not reflect who you are today. This can make your office feel very dated, further harming your culture.
Over the last 2 years, many companies have moved to a hybrid working model. Now they are certain this is a long-term change they are adapting their spaces to better suit this new way of working.
Your office can have a huge impact on the individual and collective performance of your teams. If your office has poor space utilisation it can cause your people serious frustration and lower their performance.
Once you have defined the office problems holding your people back, you can create a vision for the future of your workspace. This includes the types of spaces it will include, how your staff will use it, and how it will improve your business. By getting a clear picture of what you want your office to become, you set a focus for the entire project, and it helps keep the required investment in context.
Get a Rough Budget
Once you have defined the problems that your office refurbishment will solve and the key benefits it will bring, the next task is to determine a rough budget. This does not have to be a hard and fast number, but it is crucial to give potential contractors an idea of the investment you are considering. Without this, your office refurbishment company will struggle to create a design that meets your needs. They won’t know if you are prepared to spend enough to fulfil your brief.
To get an approximate idea of what your office refurbishment will cost, you need to consider 6 factors: scope, size, specification, state, services, and setting.
The scope of the work you are carrying out will have the largest impact of any one factor on your office refurbishment quote. A refurbishment can involve anything from adding one executive office to completely refitting an entire workspace. With such a wide range of options, the costs can vary massively, depending on the extent of the work you require.
The size of the area you are refurbishing in your office will also heavily impact the cost of your project. Contractors calculate their quotes 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.
The third key factor that will affect the cost of your office renovation is the state of your building. Older buildings with solid walls and floors are much more complex to alter, and the cost increases as a result. Buildings in poor condition are also at a much higher risk of encountering problems during the project.
A high specification level in your project can cost more than twice as much per sq./ft as a basic design. More expensive specifications tend to be much more ergonomic, acoustic, and durable. However, design features may look “cool” but serve no real purpose. Ultimately, there is no ‘right’ specification level- it's what is best for you and your staff.
The condition of the services can also add unexpected costs to your office refurbishment quote. The power & data, lighting, fire safety, air conditioning and plumbing systems are all essential to keep your office running. Air conditioning and sprinklers are particularly expensive to adapt, as they require a lot of labour-intensive reconfiguration.
The final element that will have an impact on the cost of your project is the location. In urban areas, especially London, labour costs are much higher than in some other parts of the country. In areas such as central London, access to site will be difficult, which will increase costs.
Based on projects we’ve worked on recently, most mid-touch refurbishments will range from £20 to £100 per sq/ft. This does not include furniture. A low-spec version would cost around 25% less than the figures below, while a high spec refurbishment could be an uplift of 50% or more.
Prices for a typical 5,000sq/ft office refurbishment could vary from £75,000 to £750,000 or more. This depends on the scope, specification and other factors outlined above. These numbers are based on office refurbishments we’ve carried out over the last 2-3 years, though each project is different. Your unique requirements will come with unique costs.
Full Strip Out & Fit Out
£20 per Sq. / ft
£30 per Sq. / ft
£40 per Sq. / ft
To learn more about what affects the cost of your refurbishment, and what your office refurbishment might cost, check out our office refurbishment costs blog.
Establish Business Case
Once you have established roughly what it will cost to fulfil your office refurbishment brief, you need to establish a clear business case to prove that it is the right thing for your business. The problem is, it can be very difficult to calculate the ROI of your office refurbishment. There are so many different considerations, from operational costs to culture.
However, there are 4 main ways an office refurbishment can deliver a return on your investment: operational costs, talent attraction and retention, wellbeing, and productivity.
The cost of running the office every day is around 25% of annual rent. An office refurbishment is an opportunity to reassess all these costs and how to reduce them. For example, air conditioning often accounts for around 40% of a company’s total energy usage. Modern HVAC systems are up to 50% more efficient than systems from 10 years ago.
Recruitment and Retention
Your office plays a crucial role in attracting the best staff to your company. First impressions are crucial, and a well-designed office is central to this. A survey of 1,000 UK office workers found that almost half of respondents agree that the room where they were interviewed would influence their opinion of whether or not to accept a job offer.
Workers in the UK lose an average of 30.4 working days a year due to sickness, or illness-related underperformance, costing the economy £78bn. Modern offices maximising biophilic design have reported a 30% decrease in sickness-related absences. They also reported an increase in cognition and sleep quality.
Of course, the main benefit many executives are looking for in an office refurbishment is an improvement in productivity. In recent years, productivity has become a major concern for company leaders. This is for good reason: most companies have seen a 3-6% productivity drop since 2020. Research shows that a well-designed office can increase productivity by up to 20%!
The total return on investment of your office refurbishment will depend a lot on the quality of your current office design, as that is the baseline by which all gains will be judged. By simultaneously reducing operating costs and improving the performance of your people, an office refurbishment can be an excellent investment in your company’s ongoing success. To learn more about building a business case for your office refurbishment, read our blog What is the ROI of an Office Fit Out?
Getting Started On Your Office Refurbishment
Starting by defining your current workspace challenges and your workspace vision will help to make your office refurbishment a success by ensuring you stay focussed on getting the best outcomes, and not just the lowest cost. Once you have created a brief, you can then create a rough estimate of your office refurbishment costs, to see what you will need to spend. You can then consider the return on investment that fulfilling your brief will have, and if it justifies the required outlay. This will enable you to get high-level signoff for the right budget without wasting a lot of time and effort cutting costs and getting extra budget.
Approaching your office design & build company with a clearly defined brief as well as budget signoff will enable them to create an office design that is much closer aligned with your business needs. Your project will be in a much better position to solve the pressing workspace issues you are facing and help set your company up for success in the years to come.
Want to learn more about planning your office refurbishment? Read our article explaining the 5 steps to office refurbishment success. There, we’ll explain the 5 essential steps necessary to help deliver your office refurbishment on time, on budget, and on brief. We’ll also include several tips for implementation to help you get started.