Building costs per m²

In this survey, building costs per m², sometimes referred to as direct costs (as opposed to indirect costs), are for construction of the building, including preliminaries (or general conditions) costs and substructure, columns, upper floors, staircases, roof, external walls, external doors, internal walls, internal doors, wall finishes, floor finishes, ceiling finishes, fitments, plumbing, HVAC, fire protection, electrical and communication systems and transportation systems.

It is assumed that building costs are based on the typical building standards and building methods for the region.

All data was collected in Q1 2021.

1 m2 = 10.7639 ft2

Exclusions from building costs per m²

External works, landscaping, professional fees, demolition, loose furniture, fittings and equipment, developer’s internal costs and finance, local authority fees and headworks charges, land, legal, finance and holding costs, GST or sales taxes, site investigation and test bores, removal of significant obstructions in the ground, abnormal footings. Allowance for underground or onsite car parking is also excluded from the building cost unless stated otherwise.

Fit-out cost data

We have provided a low, medium and high fit out cost range for our data. This scale denotes the quality of space, capacity, resilience, number of cellular spaces (meeting rooms, offices) and interventions of the base building.

There are however projects that are above the upper end of this scale that are highly specified and provide even higher quality office space.

For ease of comparison across global markets we have used ‘Category B construction costs’ as the baseline in our fit-out data. This cost is expressed against the usable square meterage of office space.

Category B Construction costs include: main contractor preliminaries and fees/ overheads, internal walls, partitions and doors, floor finishes, wall finishes, ceiling finishes, joinery (millwork/architectural woodwork), mechanical, electrical and plumbing systems to suit layout, structured cabling, Loose furniture (desks, chairs, breakout furniture) and AV (TV screens, conference room VC equipment, room booking systems).

Category B construction costs exclude: Category A works (developer specification raised access floors, ceilings, basic lighting and basic cooling), Professional Fees, IT Equipment and Software and move costs). All local taxes are excluded.

All regions have individual nuances.

Please reach out to our PMO leadership team as introduced in this document for further support.

Labour costs

Labour costs are the all-inclusive cost to the employer, which includes the basic hourly wage, allowances, taxes, and annual leave costs. Where paid by the employer, this can also include workers’ compensation and health insurance, pensions, and travel costs and fares.

Labour costs exclude overheads, margins and overtime bonuses.

Construction costs and exchange rates

This survey’s construction cost data comes from programmes underway at the beginning of 2020 and excludes applicable taxes. All exchange rates are from March 2021.

How corporate occupiers can mitigate rising costs

In the face of the challenges currently facing the sector, corporate occupiers should consider a combination of the following practices to mitigate rising fit-out costs. Our experience in the market means we have the tools and expertise to help clients work through these approaches.

Better programme delivery through Portfolio Management

Successful programmes and projects are delivered by adopting the right operating model. Managing projects at a portfolio level can offer some key commercial benefits compared to delivering them individually as standalone projects.

Portfolio Management models also enable better design, procurement, and collaboration through their key operating features, including:

• standardised design guidelines and specifications which provide consistency, reduce the risk of deviations, and prevent issues during delivery
• intelligent procurement that aligns business objectives and project strategy, which maximises value for money while minimising project and commercial risks.We were able to drive significant cost efficiencies for our key clients across their programmes through volume purchasing and standardising contract terms with fixed rates
• integrated partnerships and soft-landing approaches, which help the value chain achieve better strategic and vision alignment, foster stronger collaboration and early engagements, and encourage risk/reward sharing among stakeholders involved.

Leveraging data and technology to make better informed decisions

Standardization of measurement and costing is made far simpler with the right tools. The key to success is ensuring all users are comfortable with and in agreement with the chosen technologies and how they will be used.

It is also important that corporate occupiers and their supply chain are working from one easily interpreted version of the truth. Agreeing measurement and costing principles and data collection tools from the outset will save valuable time and prevent ambiguity throughout projects.

With the right data and technology framework, the collection and analytical reporting of project cost information can be automated, more consistent and accessible, which enables corporate occupiers to make better informed decisions.

Transitioning to net zero

Designing for performance is key in driving net zero across capital projects and achieving better value for assets across their lifecycle. Greener design and specifications contribute towards a circular economy where products and assets can be repurposed, recycled, and reused, resulting in better resource and cost efficiency.