How is the cost of your new office changing?
Office designs are evolving, with new priorities having a significant impact on costs
- Victoria Shreeves
The traditional workplace has been disrupted like never before. This has meant many organisations are reviewing their portfolios in order to increase flexibility and reduce costs. There is an opportunity to both renew and reinvest in areas of the workplace and meet new expectations from employees.
Across Europe, the average cost for fitting out office space is up by 6.6 percent year-on-year to €1,631 per square meter. Labour shortages, Covid-19 health and safety considerations, as well as concerns around material availability and delivery, are set to further impact on higher material costs and drive price increases.
Here are three key office design trends that will have an impact on fit-out costs in 2022 and beyond.
1. Hybrid work and a partially remote workforce
In a hybrid model, it‘s anticipated that employees will on average work remotely for two days per week, according to recent JLL research on EMEA worker preferences.
Future office designs will in some cases place a greater emphasis on collaboration, as well as social and community spaces, with less of the office footprint dedicated to individual workstations. Instead, more emphasis will be given to ‘pull’ factors and increased efforts to lure employees to the workplace.
New ways of working create potential cost implications. Space now needs to be carefully designed and customised so that the office can meet the requirements of multiple overlapping users on any given day. The cost, for example, of a collaborative and mobility-focused office design will on average be higher on a per square meter basis than a standard layout. Construction costs are higher, as less of the footprint is given to simple open spaces filled by rows of desks.
2. Tech-centric designs to support new ways of working
Technology will be crucial in supporting a hybrid or work-from-anywhere model, requiring robust digital connectivity, smart technologies, and AV systems. A permanent shift to virtual collaboration will require a reimagination of the tech setup in many existing office designs today.
The amount of technology in the workplace is expected to continue rising, which will result in increased complexity to support a more robust technology suite. However, cost implications will of course vary depending on both the quality and scope of the technology being integrated.
3. A renewed focus on sustainability and health & wellness
Sustainability is now a key factor for companies as they fit-out and manage their spaces. Accreditations are growing in popularity as a means to demonstrate green credibility. Certifications such as BREEAM, LEED and WELL will play an increasingly important role in the design and construction process.
The cost of achieving any wellness or sustainability certification will generally require higher upfront costs and capital expenditure in addition to a fee to apply for and receive the certification.
However, the energy efficiency gains realised through sustainability certification will usually result in lower operating expenditure or running costs over time. The cost implications for any project depend on the level of certification being sought and whether the cost premium can be reduced if included in the early stages of design and the correct building is chosen for the intended purpose.
To find out more on office fit-out costs across major EMEA cities, including the impact of currency fluctuations, download JLL’s latest EMEA Fit-Out Cost Guide