What is the cost of an Office Fit-out in 2023

The total cost of an office fit out project can be very difficult to predict and more often than not even harder to audit once delivered, given the wide number of parties typically involved and lack of transparency.
31 Jan
Studio DB

In our 2022 office survey, 57% of real estate executives cite the difficulty of planning and budgeting as their top challenge when managing workplace projects.

Although the total cost can vary significantly from one design to the next, the below summary provides a high level view of what to expect in 2023:

Based on our research a typical A grade fit-out will fall within this range. This pricing however relies on the assumption that the base build will be in a new or as new condition, with the services infrastructure delivering acceptable levels of power, HVAC, security, accessibility, sustainability capabilities and emergency response capabilities. And this is where it becomes critical to ensure a thorough assessment of the building is carried out as part of the fit out budgeting phase to ensure an accurate estimation of all costs. This is particularly important in the context of New Zealand where our construction costs are amongst the highest in the world while office rents are only ranking at the 60th place. Therefore the share of fit out as a proportion of total workspace cost is much higher in Aotearoa then in most countries and particular attention needs to be paid to all aspects of your relocation project, starting with planning and budgeting and only then looking at the property part.

By asking the following question, you can begin to understand the potential expenditure and budgetary requirements for your project:

Do you need cosmetic or structural changes to the building?

When considering your new workspace, are the changes wholly cosmetic (e.g. decorating, new flooring) or will you need to develop the architecture of the building (e.g. new walls and doorways). If you’re considering the latter, your costs will be higher due to the complexity of the work.

What AV and ICT systems do you require?

Once the integration of technology into the workplace was seen as extraneous to the design and fit out. Current tendency is to incorporate these systems into the space planning and furniture specification. Your ICT and AV systems will determine, among many factors, chiefly your ability to be flexible, productive and collaborative in today’s market.

What furniture requirements do you need?

Whether you are creating a meeting room or an entire sales floor, you’ll want to make the most of that environment. The correct furniture specification will ensure staff can work safely, comfortably and apply the necessary tools to perform at the best of their abilities.

In recent years, we’ve seen historically overlooked furniture aspects becoming commonplace in workplaces, such as sit/stand desking, task lighting and acoustic paneling. We believe this demonstrates a trend towards companies paying more attention to the health and wellbeing of their staff.

When do you want the changes made?

Office fit-out projects tend to take longer than anticipated. The construction part typically is the shortest, with onsite works ranging from 10 to 16 weeks depending on the scope and existing conditions. The design part including lodging for consent, managing consultant reports and other compliance-related tasks usually takes between two to six months depending on the complexity of the project. Before engaging in design, you should invest in a thorough workspace strategy that will not only help you understand what workspace will work for your business and your team but equally help reduce the amount of design revision as well as reducing overall project time, therefore cost. In summary, for a company of 100 staff, we would recommend starting the process 12 to 18 months before your move-in date or lease expiry

What size office space do you need?

This question usually elicits the answer “as much as I have now” and while for some this might be accurate; it’s often a more complex issue. The amount of office space you need will be based on your aspirations, current space requirements, and the market. Recent studies show that traditional office utilization is lower than 25% in most cases, with the main reason being suboptimal workspace design. This means that depending on your business ways of working, your new hybrid office could be as small as 5 sqm per person.

Associated with real estate values, this will be one of the most expensive questions you’ll be asking. Thus, a workplace appraisal can prove useful in asking questions you may not have considered.


Traditional, design and build, or Hybrid?

If you’re delivering a project using traditional construction methods, a large office refurbishment usually demands interior design experts, builders, workspace planners, and office furniture suppliers. If you’re undertaking structural changes, you might need a surveyor, structural engineer, and an interior architect too. Then you need a project manager to lead the transformation and ensure that all parties are working in perfect harmony. Although traditionally the most used, this method is losing market share to the hybrid delivery model as it is often slow, over consulted therefore more expansive and less transparent.

Design and build (D&B) offers clients a turnkey solution with design, specification, consultancy, project management, and construction services all under one roof. Industry research shows that as much as 85% of interior fit-out projects with a value of less than $2,000,000 are procured via this model. Although this method is faster and usually more cost-effective it also presents a risk for the quality of the build to be compromised as the operator often commits to a price before having undergone proper due diligence and completed full design specifications which can lead to corners being cut on the quality side.

Hybrid (Studio DB methodology)

This is by far the fastest-growing methodology, although only as mall number of companies can deliver using this method. Essentially this way of delivering projects combines the benefits of both D&B and traditional whilst being faster, more transparent, and risk-free for the client.

As we entered 2023, Studio DB has delivered more than 2000 office projects since its creation 57 years ago, all the while retaining the highest customer satisfaction in our industry.

If you are looking to rethink your workspace arrangement this year give us a call, we’d love to chat.

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