Chapter 2
Detailed Cost Analysis
Global Office Fit-Out Cost Guide 2024
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3a. Activity-Based Layout: APAC Cost Data
Figure 4: Total Fit-Out Cost
Figure 4: Build Your Own Budget
3a. Activity-Based Layout: EMEA Cost Data
Figure 5: Total Fit-Out Cost
Figure 5: Build Your Own Budget
3a. Activity-Based Layout: Latin America Cost Data
Figure 6: Total Fit-Out Cost
Figure 6: Build Your Own Budget
3a. Activity-Based Layout: North America Cost Data
Figure 7: Total Fit-Out Cost
Figure 7: Build Your Own Budget
3b. Team-Based Layout: APAC Cost Data
Figure 8: Total Fit-Out Cost
Figure 8: Build Your Own Budget
3b. Team-Based Layout: EMEA Cost Data
Figure 9: Total Fit-Out Cost
Figure 9: Build Your Own Budget
3b. Team-Based Layout: Latin America Cost Data
Figure 10: Total Fit-Out Cost
Figure 10: Build Your Own Budget
3b. Team-Based Layout: North America Cost Data
Figure 11: Total Fit-Out Cost
Figure 11: Build Your Own Budget
3c. Event-Based Layout: APAC Cost Data
Figure 12: Total Fit-Out Cost
Figure 12: Build Your Own Budget
3c. Event-Based Layout: EMEA Cost Data
Figure 13: Total Fit-Out Cost
Figure 13: Build Your Own Budget
3c. Event-Based Layout: Latin America Cost Data
Figure 14: Total Fit-Out Cost
Figure 14: Build Your Own Budget
3c. Event-Based Layout: North America Cost Data
Figure 15: Total Fit-Out Cost
Figure 15: Build Your Own Budget
3d. Specialty Cost Considerations: Reinstatement
Overview of Occupier Requirements
Methodology
Our model for this study is a hypothetical 1,000-sq.-m. (10,764-sq.-ft.) office in a mid-size building located in the central business district of a major city in each country or region. The premises are assumed to have a typical hybrid office fit-out installed by the tenant that has sustained moderate wear during the lease term.
The cost assessments for each country are based on typical high and low rates for dilapidations or liabilities and are based on USD per square meter/square foot.
The cost advice is indicative, and variations will always exist between individual properties, influenced by the lease terms and the building in question. That means the use of these rates for IFRS 16 provisioning is unlikely to meet an auditor’s requirements as it may not provide the correct liability for a given property. An individual assessment of each property is therefore strongly recommended.
Typical Lease Obligations
Reinstatement:
- The reinstatement of the tenant’s alterations and additions is required, returning the premises to the condition it was before occupation.
- The landlord will accept the tenant’s additions and alterations remain in place at expiry, no reinstatement is required.
Process:
- Both parties negotiate a financial settlement with the landlord instead of the tenant carrying out the work.
- The tenant carries out the work needed to fulfil its obligations, so the premises are handed back to the landlord in compliance with the lease.
Repair and Condition:
- The tenant is expected to keep the premises in good condition, remedying any defects and leaving it in good condition.
- The landlord accepts wear and tear, but anything beyond this is considered tenant disrepair and must be remedied.
Key Assumptions
- It excludes the cost of removing tenant chattels (furniture, AV, IT and security installations).
- Rates adopt the typical approach to reinstatement for that country, which is stated in the guide. The tenant fit-out is assumed to be in line with the drawings that are provided within the guide.
- No allowance has been made for loss of rent, non-recoverable value-added tax (VAT) or professional fees associated with the undertaking of the works.
- The base date for prices and exchange rates is August 2023.
- All work is to be carried out in a single contract and within normal working hours.
- General wear and tear from routine building use, rather than significant disrepair, will be evident.
- Tenants are assumed to have internal repairing leases and only have a responsibility for their demise. This does not extend to any elements of the common parts, including structure, frame, sanitary accommodation, stairwells/lifts/lift lobbies, windows and central mechanical and electrical services.
The space was originally provided on an open-plan standard U.K. CAT-A basis, with suspended ceilings, raised access floors and carpet floor tiles, plus mechanical and electrical services (air conditioning, ventilation, lighting, fire detection) provided in an open-plan arrangement.
No structural reinstatement works are required.
Figure 16: Reinstatement/Dilapidations Cost Data Americas
Figure 16: Reinstatement/Dilapidations Cost Data APAC
Figure 16: Reinstatement/Dilapidations Cost Data EMEA
Section 3e. Specialty Cost Considerations: Move Management
Move management and physical relocation of employees and their belongings is an integral part of a CAT B project and takes place either during or upon completion of the fit-out work. Moves have the potential to disrupt business continuity, which can impact productivity.
Careful organization and sequence planning is essential to minimize disruption. This usually involves a move consultant working with a range of client department representatives to identify the current set-up, accommodate activities critical for business continuity and plan for the movement of employees, furniture and equipment.
The move consultant is responsible for all aspects of change management and implements a comprehensive communications plan at all levels to ensure everyone affected is informed and has input into the project, to meet their needs where possible.
They also work with client-specified physical move providers or leverage a preferred supplier list, acting as principals to command preferential rates.
Beyond business transition, clients often require clearing or disposal of redundant furniture and fittings. An accredited environmental management system allows the move management team to manage the entire clearance process on the client’s behalf. The team seeks to re-use, re-purpose, donate or environmentally dispose of surplus furniture and effects, promoting client corporate social responsibility goals.
The below tables cover a per-person cost and a per-square meter (foot) cost in dollars of moves in EMEA and Americas. These also include an average, indicative management fee, which can range from 10%-40%, depending on location and other factors. Individual moves vary, and the below is indicative of moves relating to the team's design, within a five-mile radius of the original offices.
Interpretation
Personnel Move
A move of persons only. Assumes two persons sharing a crate and moving personal items only, typically within the same building or nearby premises. Assumes basic items such as laptops etc. can be carried by staff separately.
Technology Move
A Personnel Move with items such as screens, docking stations and other IT or audio-visual considerations.
Full Move
This includes the above two moves, as well as other furniture, fittings and equipment (FF&E) items which will require transport to a new site.
Figure 17: Move Cost Per Person: North America
Figure 18: Move Cost Per Person: Latin America
Figure 19: Move Cost Per Person: APAC
Figure 20: Move Cost Per Person: EMEA
Figure 21: Move Cost Per (Square Foot): North America
Figure 22: Move Cost Per (Square Foot): Latin America
Figure 23: Move Cost Per (Square Foot): APAC
Figure 24: Move Cost Per (Square Foot): EMEA
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