If your organisation is considering an office fitout, one of the first questions to be answered is – how much does an office fitout cost?
Most companies faced with this question won't have the slightest idea where to start, and that’s ok, because its not a simple question to answer. However, in answering it you will begin setting expectations and start aligning your stakeholders and key decision makers.
Save time and get a high level understanding of what your office fitout might cost with Ratesmiths budget calculator - access it free here.
There are many variables to consider when assessing how much an office fitout costs. It requires a structured process to begin determining the budget required, and this is where organisations without experience can struggle.
Before speaking to office design and fitout suppliers, here are a few questions you should attempt to answer to gain an understanding of your needs so you can effectively brief the market.
1. What size space do you need?
For many companies looking to incorporate flexible working for the first time as they return to the office post COVID lockdowns, this can be very challenging to answer. The idea isn’t to settle on a finite number here, but to narrow it down to a range. As a general rule, companies located in the key central business districts can start by allowing for:
- 8sqm per person – compact layout
- 10sqm per person – standard layout
- 13sqm per person – spacious layout
Organisations outside the core metro markets where rents are lower are more likely to allow for 12sqm per person to 15sqm per person.
With flexible working here to stay for at least for the medium term, it’s advisable to establish some key flexible working principles around numbers of office days and the greatest expected number of employees on site at any one time, so you understand the number of desks required and the resulting possible space savings. As an example:
- 3 office days with 60% of staff in at any one time – possible 30 to 40% reduction in desks required
- 4 office days with 80% of staff in at any one time – possible 10 to 20% reduction in desks required
Remember, the idea isn’t to get an exact number, just a close range. Take a conservative approach and allow for a 10% swing either way. You will be able to tighten your brief when working with your property advisor and office fitout partner.
2. Open plan vs a high proportion of office and meeting rooms?
While additional walls and doors add to costs, the greater potential impact is in providing the right cooling and fresh air supply to rooms, reconfigure lighting and potential sprinkler relocations to comply with Australian Standards.
3. What level of finish do you want?
Every element of your fitout can be tailored to your specific requirements. Items off the shelf are more cost effective but don’t have the impact of bespoke designed pieces. Natural products like woods and stone look impressive, feature lighting and ceiling details add character to a space, but this all adds considerable cost to your fitout.
4. What grade building will the fitout be required in?
Buildings are categorised by grade. At the top of the tiering, Premium and A Grade buildings will have more strict approvals processes in place and may only allow approved consultants to work on integrated building systems. Private consultants may need to review and sign off proposed works, all this adding another layer of fees and red tape, extending the timeline of your project build. Quite often, the quality of the building you move to will directly correlate to the level of finish you will need to deliver for your space.
5. Is there an existing fitout in place?
If you are moving into a space that has existing fitout elements in place, you may need to factor in the cost of demolition. You should allow $150 per square meter to cover this expense.
6. Are you exiting an existing office space?
When exiting your current office space there are usually additional costs to factor into your financial modelling. It’s important to understand the terms of your lease and whether you have a make good obligation, as this can add $250 - $350 per square meter (at the time of publishing) to the cost of your project and must be completed prior to the end of your lease.
While designs can be delivered to any realistic budget, the lower the $ per square meter value, the greater the compromise on space and finishes. There are greater economies of scale in larger projects over 1,000sqm, making a lower $ per square meter spend achievable.
Calculate the total budget and $ per square meter you should allow for your office fitout, using Ratesmiths space and budget calculator - access it here now.
Having an idea of your budget during initial discussions with potential fitout partners will help to streamline the process, providing designers with some parameters to develop their designs. This avoids the proposed solution being way off the mark and having to be redesigned. Trust is a fundamental part of any office fitout project. Being open and sharing information helps to build trust and this works both ways.
If you are unable to provide a budget, the next best approach can be to provide information on the $ per square meter rent being charged and the incentive % negotiated as part of your lease deal. This will raise the question, do you want to keep the budget within the incentive? How much of the incentive are you looking to apportion to rental abatement? The resulting discussion will ensure both parties are aligned and provide you with additional insights and learnings.
When engaging design and fitout companies, here are a few top tips for questions to ask:
- What is the typical $ per square meter range you have delivered for a similar sized project? It’s good to ask for case studies for context of quality.
- How much would it cost to reproduce your existing office fitout? While this might not be what you want to deliver, it will provide you with something tangible to begin building your knowledge. This will also help with your initial assessment of potential partners and their level of expertise.
- How big is the fitout company? It’s good to understand the size of the company to ensure you are choosing the right partner to deliver your office fitout. Operating costs will vary depending on the size of the business or experience level of the team. The cost of the fitout may be the same, but the value you get might be better or worse.
All design and fitout suppliers registered on the Ratesmiths platform provide their typical $ per sqm budget range they deliver projects within. This helps you filter according to your budget and ensure you are matched with the right suppliers to deliver your office fitout.
For an obligation free demo of how Ratesmiths can help you budget effectively for your office fitout, get in touch today.