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How to Set an Office Refurbishment Budget

Updated: Mar 11

Office Refurbishment Cost

Do you need to refurbish your office? If so, one of your biggest questions will be "How much will my office refurbishment cost?" Setting a budget is a crucial part of your office refurbishment. Set your budget too low, and you will have to reduce the scope and specification. You also increase the risk of going over budget. Set your budget too high, and you will waste valuable capital. You also balance the cost of the refurbishment you need with available funds.

 

We've been designing and building office refurbishments for 16 years. In that time, we've helped countless companies decide on the right budget for their refurbishment, and then plan and deliver a refurbishment within that budget. In this article, we'll go through the 3 essential steps to set the right budget for your project and company. By the end, you'll know how to set the right office refurbishment budget for you.

 

Set Your Brief

When starting to plan your refurbishment, it can be tempting to start thinking about design features and finishes straightaway. However tempting this may be, it’s important you don’t. Planning features and finishes before defining the key goals of your project risks a lot of wasted time, money, and effort.

 

To ensure your office refurbishment is the success you need it to be, you need to start with “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 project will be a failure. 

 

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 your company leadership a guide as to what this project will cost. It will also give your design & build company an idea of the investment you are considering. Without this, they might 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.

 

 Scope

The scope of the work you are carrying out will have the largest impact on your office refurbishment quote. With such a wide range of work possible, the costs can vary massively depending on the extent of the work.

 

Size

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. 

 

State

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.

 

Specification

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. Ultimately, there is no ‘right’ specification level. It depends on what is best for you and your staff.

 

Based on projects we’ve worked on recently and 3rd party market reports, most mid-touch refurbishments will range from £24 to £56 per sq/ft. This does not include furniture. A low-spec version would cost around 25% less, while a high-specification refurbishment could be an uplift of 50% or more.

Light-Touch Renovation

Mid-Touch Refurbishment

Full Strip Out & Fit Out

Low-Level Specification

£19 per Sq. / ft

£24 per Sq. / ft

£89 per Sq. / ft

Mid-Level Specification

£24 per Sq. / ft

£39 per Sq. / ft

£127 per Sq. / ft

High-Level Specification

£39 per Sq. / ft

£56 per Sq. / ft

£188 per Sq. / ft

The reason for the huge jump in the cost of a full strip out & fit out is primarily the extent of the scope. The existing office has to be completely stripped out and disposed of, unlike the other two levels.

 

Prices for a typical 10,000 sq/ft office refurbishment could vary from £190,000 to £1,880,000 or more. This depends on the scope, specification, and other factors outlined above. It's worth saying, however, that every project is different. Your unique requirements will come with unique costs.​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.

 

There are 4 main ways an office refurbishment can deliver a return on your investment: operational costs, talent attraction and retention, wellbeing, and productivity.

 

Operational Costs

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.

 

Wellbeing

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.

 

Productivity

The main benefit many executives are looking for in an office refurbishment is a productivity improvement. 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. To learn more about building a business case for your office refurbishment, read our blog What is the ROI of an Office Fit Out?

 

Setting Your Office Refurbishment Budget

Now you've read this article, you're able to set the right budget for your office refurbishment. Defining your brief and goals is a crucial first step because it gives context to the investment you are about to make. You then need to roughly calculate the cost of what you need, and build a business case. Finally, you can compare that cost to available funds, and adjust accordingly. By keeping your project on target and in context, you can ensure that your project is not only delivered on budget but also on time and on brief.

 

Setting the right budget is only one part of a successful office refurbishment plan. To learn about the rest of the process, download how to plan an office refurbishment. It's a 7-step guide to help you plan your office refurbishment. This will take you from defining your brief right through to signing the contract. Download your copy here.

 

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