The Cost of Moving Office
Every week, we speak with companies thinking about relocating their offices. They may be looking for a larger space due to growth, looking for a smaller space because of hybrid working, or simply need to find a new space due to a lease end. Nearly always, their first two questions are:
- How long will my office relocation take?
- How much will my office relocation cost?
Obviously, the answers we give vary a lot based on the size of the company and their specific project brief. We’ve written an article explaining everything you need to know about office relocation timeframes in our article how long does it take to move office? Here, we’ll focus on the second question: the cost of moving your office.
In this article, we’ll break down everything you need to know about how much your office relocation project will cost, including
- Finding A New Space
- Survey & Legal Costs
- Office Fit out, and:
While it may be tempting to start by looking at available offices on the market, this is a mistake. It’s important that you start your office relocation with a solid planning process. This plan will be your go-to guide over the next 12 months, keeping your project on track. It needs to include 5 key items: overall workspace strategy, project objectives, key milestones, new space requirements, and commercial feasibility analysis.
If you already have a fully defined workspace strategy that you are happy with, then there will be no upfront cost to planning your office move. Working with your management team, you will be able to distill your overall strategy into objectives for this specific project. You can then set your key project deadlines, define the specific features your new office will need, and build a business case to get project signoff.
If you need the help of a workplace consultant to help you develop your workspace strategy then this will cost between £1000 and £5000. This will increase or decrease depending on the size of your leadership team, the complexity of your needs, and any extra workshops required to fully define your workspace vision. To learn more, read what does workspace consultancy cost?
Finding a New Space
The cost of your office lease or rent will be your biggest office relocation cost. Office rates are calculated per square foot per year. Depending on your office design, your staff will need between 100-200 sq/ft per person, including common areas.
The advertised rent cost is different from the cost you actually pay. In addition to the space rental costs, you will also have to pay service charges to the landlord. This covers utilities and common services, from electricity to receptionists. Another cost is business rates – a tax based on the rental value of your office.
An experienced and well-connected commercial estate agent is essential to finding the right space at the best possible price. Using their network, they are often able to find office space before it comes on to the open market. This makes the space cheaper, while their negotiating skills will further reduce the cost you pay. Some estate agents will charge a percentage of the fee they save against market rates, while others will charge a percentage of the overall rate. For many agents, this will equate to 3-5% of the first year’s rent, though this can vary.
Unsurprisingly, the cost of your office rent depends on two key factors: location and quality. The cost of office space in London is highly variable, so it is broken out here. The below rates are based on good quality space with standard amenities. For landmark buildings or tower blocks, the rates will be much higher. Lower-cost (and quality) spaces will also be available.
Survey & Legal Costs
Once you have found the right space, you will need to carry out due diligence to ensure the space is suitable. A building survey by a qualified building surveyor is essential. They will produce a detailed report of the condition of the building, including any potential repair and maintenance costs you may not have included in your budget. Premises survey costs in London range between £750 to £5,500. This will differ depending on the condition and size of the premises being surveyed, as well as the detail of the survey you require.
Commercial property law is complex, and a specialist solicitor will be necessary to negotiate the lease contract on your behalf. If you are not adequately protected in your terms, you could be liable for large costs in the future. Your legal costs for signing a lease will likely be between £3,000 and £10,000. It may be higher or lower depending on the size of your space and the terms of the lease.
The office you are vacating also needs to be considered. Most lease contracts have a clause stipulating that at the end of the lease the space must be restored to its original condition. This will typically involve partition strip out, redecoration, reconfiguring the utilities to their original state, and cleaning.
Depending on how much you have changed your space from its leased state, this will likely cost between £10 and £20 per sq/ft. In many situations, the landlord will be willing to negotiate a settlement. The landlord will survey the condition of the existing space and how much it has been altered. You will then negotiate a settlement sum payable to the landlord, and they will waive the dilapidations clause.
There are two common design models for office relocation fit out: pitch to win and paid design. With pitch to win, several design & build companies survey your office. They create a design and then pitch to win your project as an integrated design & build package. With this model, you can generally expect to spend around 2-4% of your overall project costs on the design. There are no upfront costs for the design, as it is rolled into the overall project cost.
When using the paid design model, you work with one design and build company to create a design that you are happy with. They then create a full scope of works, which you tender out to several design and build companies. Depending on the complexity of the design concept and optional extras, a paid design package will generally cost £5,000 - £20,000. To learn more about office design costs, check out this article.
Office Fit Out
Every business is different, and so is every office. There are hundreds of things that can increase or decrease the cost of your project. However, there are 5 major factors that will control your office fit out costs: size, specification, state, and services. 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 larger projects require much more material and labour to fit out. There is much more to a fit out than meets the eye, such as subflooring and insulation. More materials may be required than you think. Due to economies of scale, the costs per sq/ft costs will often be lower for larger projects, especially those over 10,000 sq/ft.
The specification is almost as important as size when it comes to your office fit out costs. A basic specification level will cost around £50/sq ft, while a high-level specification will cost £100 or more per sq/ft. Upgrading the specification of your workspace will come at a cost, but often is a good investment. Ultimately, there is no “right” specification level – it’s what suits your brand and your budget best.
The existing condition of your building will also impact the cost of your office fit out. 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 discovering problems with the building during the project, which may 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. If they are in poor condition, they may require extensive remedial work before you can begin other works. Systems such as HVAC and sprinklers are particularly expensive to adapt. This is because the entire system has to be decommissioned for the alterations and then recommissioned after the works.
Based on office fit out projects we’ve carried out recently, most office fit outs will range from £47 to £100 per square foot. This means that for a 5,000 sq/ft space, a full category B office fit out would cost from £235,000 to £500,000. To find out more about what your project will cost, download our office fit out costs guide.
The final key cost you will face in your office relocation is moving all your people and equipment from your current office to your new location. There are several key factors that will dictate the cost of your office removal. The ease of access (what floor your offices are on, is there a good lift) will have a big impact on the cost.
The distance between the two offices will also play a part, as will how much furniture and fixtures need relocation. If you need temporary storage for some equipment, this can also be secured fairly cheaply. The costs will vary depending on the above factors, but most removals cost £110-£160 per person.
Planning Your Office Relocation
No two office relocations are the same. There are many factors affecting the cost of your office move, from the extent of your workspace strategy planning to the distance between your current location and your new office. With careful planning and expert advice, you can make sure your office relocation is delivered on time, on budget, and on brief.
To take the next step in planning for your office move, download our ultimate office relocation guide. This is one comprehensive guide that will help you understand everything that goes into an office fit out, what it costs, and how long it will take. First, we’ll give an overview of what an office relocation is likely to cost your company. We’ll then go through the 8 stages of an office relocation. Each section will be accompanied by checklists, timeframes, and explanations. Download your ultimate office relocation guide here.