New Build Office – Cost drivers and impacts with Fiona Corcoran
Starting from scratch, unhindered by an existing building’s limitations, designing a new build office scheme affords a greater opportunity to really influence costs.
Getting the fundamentals right can deliver a high quality scheme that is efficient in cost, desirable to the market and ultimately viable to build.
Product & location
The target occupier varies throughout London’s districts with no “one size fits all” approach to specification, flexibility, quality, MEP, sustainability and amenity provision.
That said, there are broad ranges in rental values that can be achieved within areas and as the scheme will need to be viable, this in turn will influence the specification of the scheme. It is also important to know what else is available on the market in the locality.
Cost benefits can be achieved on larger projects through economies of scale; larger quantities reduce overall unit rates and afford possibilities for maximising repetition.
This should be exploited where possible, particularly on elements that account for a significant proportion of spend, such as cladding.
W:F Ratio & Façade
A major factor as external façades typically account for 15 to 25% of construction cost.
Ratios of between 0.40 and 0.50 are good but a variation of 0.10 can change overall construction costs by 4 to 5%.
Small tweaks to the design can therefore have a big influence on the efficiency of the scheme.
Number of Storeys
The unit cost for the structural frame increases with storey height; a 10-15% premium for a 20-storey building, rising to 20% for a 30-storey building and 70-90% for a 45-60 storey building.
Greater consideration must also be given to the speed of construction, sprinkler, fire rating and wind loading requirements.
Basement construction typically accounts for 8-10% of the total construction cost but the complexity and risk involved often attracts further cost premiums of 3-10%.
The overall cost and risk cost premium can be reduced by early involvement of specialist subcontractor advice to thoroughly assess underpinning and piling options, to resolve temporary works solutions and to understand the impact on ground water, neighbouring buildings and the overall construction programme.
There are many ways to deliver construction projects, the decision rests upon a balance of time, quality, cost and risk transfer.
The impact of attempting to shorten the overall project can lead to a 3-10% premium in cost but dependant on activity in the market or the ability to secure a prelet, it may be worth considering.