Moving Office
If the lease on your London office is ending in 2024, or you need to move office because your current space no longer meets your needs, your main question will be "How much will it cost?". That’s a great question and a crucial one. Unfortunately, though, the answer is "it depends". There are hundreds of different factors that will affect what you will need to invest in moving office. No two office relocations are the same, and neither are the costs.
While we may not be able to tell you exactly what your office move will cost (yet), we can go through the key costs associated with office relocation, what standard cost ranges are, and what affects those costs. By the end of this article, you'll understand roughly what your office move will cost. As a result, you'll be able to set an initial budget and start preparing for your project.
Setting a budget is only one part of planning your office move. A successful office relocation requires months of careful planning, searching, designing, and building. To help you through this complex process, we’ve created one comprehensive guide that will help you understand all you need to know about moving your office. Download your Office Relocation Guide here.
Planning
It's crucial to have a comprehensive project plan before you start looking at options for your new office location and design. Otherwise, your project will be very time-consuming and difficult to run. This is especially true in London. There are more potential offices and more complex project management requirements. Your plan needs to include 5 key items: workspace strategy, project objectives, key milestones, new space requirements, and commercial feasibility analysis.
If you already have a fully defined workspace strategy that you are happy with, then there will be no upfront cost to planning your office move. Working with your management team, you can distill your strategy into objectives for this specific project. You can then set your key project deadlines, define the specific features your new London office will need, and build a business case to get project signoff.
If you need the help of a workplace consultant, this will cost between £2,000 and £10,000. This will increase or decrease depending on the size of your leadership team, the complexity of your needs, and any extra workshops required to fully define your workspace vision. To learn more, read What Does Workspace Consultancy Cost?
Finding a New Space
The cost of your office lease will be your biggest office relocation cost. Office rates are calculated per square foot per year. Depending on your office design, your staff will probably need 100-200 sq/ft per person. To find out how much office space you need, read this article.
The advertised rent cost is different to the cost you actually pay. In addition to the space rental costs, you will also have to pay service charges to the landlord. This covers utilities and common services, from electricity to receptionists. Another cost is business rates – a tax based on the rental value of your office.
An experienced and well-connected commercial estate agent is essential to finding the right space at the best possible price. They are often able to find office space before it comes onto the open market. This makes the space cheaper, while their negotiating skills will further reduce the cost you pay. Some estate agents will charge a percentage of the fee they save against market rates, while others will charge a percentage of the overall rate. For many agents, this will equate to 3-5% of the first year’s rent, though this will vary.
Location | Rent | Rates | Service Charge |
Mayfair & St James's | £85 | £40 | £15 |
Soho | £75 | £30 | £15 |
Oxford St/ Covent Garden/ | £70 | £30 | £15 |
City | £65 | £30 | £15 |
Farringdon & Clerkenwell | £60 | £25 | £15 |
Kensington & Chelsea | £55 | £25 | £15 |
Docklands | £40 | £20 | £15 |
The cost of your office lease depends on two key factors: location and quality. The above rates are based on good quality space with standard amenities. For landmark buildings or tower blocks, the cost will be higher. Lower-cost (and quality) spaces will also be available.
Survey & Legal
Once you have shortlisted 3-5 potential spaces across London, you will need to carry out due diligence. A building surveyor will produce a detailed report of the condition of the building, including any potential repair and maintenance costs. Premises survey costs in London range between £750 to £5,500. This will differ depending on the condition and size of the premises being surveyed, as well as the detail of the survey you require.
Commercial property law is complex, and a specialist solicitor will be necessary to negotiate the lease contract on your behalf. Your legal costs for signing a lease will likely be between £5,000 and £25,000. It may be higher or lower depending on the size of your space and the terms of the lease.
Dilapidations
The office you are vacating also needs to be considered. Most lease contracts have a clause stipulating that at the end of the lease, the space must be restored to its original condition. This will typically involve partition strip out, redecoration, reconfiguring the utilities to their original state, and cleaning.
Depending on how much you have changed your space from its leased state, this will likely cost between £12 and £20 per sq/ft. In many situations, the landlord will be willing to negotiate a settlement. The landlord will survey the condition of the existing space and how much it has been altered. You will then negotiate a settlement sum payable to the landlord, and they will waive the dilapidations clause.
Design
There are two common design models for office relocation fit out: pitch to win and paid design. With pitch to win, several design & build companies survey your office. They create a design and then pitch to win your project as an integrated design & build package. With this model, you can generally expect to spend around 2-4% of your overall project costs on the design. There are no upfront costs for the design, as it is rolled into the overall project cost.
When using the paid design model, you work with one design and build company to create a design that you are happy with. They then create a full scope of works, which you tender out to several design and build companies. Depending on the complexity of the design concept and optional extras, a paid design package will generally cost £5,000 - £20,000. There is no difference in the design cost, only when you pay it. To learn more about office design costs, check out this article.
Office Fit Out
There are hundreds of things that can increase or decrease the cost of your project. However, 5 major factors will control your office fit out costs: size, specification, state, and services. Due to increased labour costs and above-average specifications, office fit outs in London tend to be 20-40% more expensive than elsewhere in the UK.
Size
Size will have the most impact on the cost of your office fit out. Larger projects require much more material to fit out, which then impacts the labour required. There is much more to a fit out than meets the eye, such as subflooring and insulation. Due to economies of scale, the costs per sq/ft costs will often be lower for larger projects, especially those over 10,000 sq/ft.
Specification
The specification is almost as important as size when it comes to your office fit out costs. A basic specification level will cost around £65/sq ft, while a high-level specification will cost £160 or more per sq/ft. Ultimately, there is no “right” specification level – it’s what suits your brand and your budget best.
State
The existing condition of your building will also impact the cost of your office fit out. Older buildings are much more complex to alter, and the cost increases as a result. Buildings in poor condition are also at a much higher risk of discovering problems with the building during the project, which may be time-consuming and expensive to resolve.
Services
The condition of the services also affects your office fit out cost. If they are in poor condition, they may require extensive remedial work. Systems such as HVAC and sprinklers are particularly expensive to adapt. This is because the entire system has to be decommissioned for the alterations and then recommissioned after the works.
Based on office fit out projects we’ve carried out recently and industry averages, most office fit outs will range from £65 to £160 per square foot. This means that for a 10,000 sq/ft space, a full category B office fit out would cost from £650,000 to £1,600,000. To find out more about what your project will cost, download our office fit out costs guide.
Relocation
The final key cost you will face in your office relocation is moving all your people and equipment from your current office to your new location. There are several key factors that will dictate the cost of your office removal. The ease of access to both offices will have a big impact on the complexity and cost of your move.
The distance between the two offices will also play a part, as will how much furniture and fixtures need relocation. If you require temporary storage or not will also play a part. The costs will vary depending on the above factors, but most removals cost £110-£160 per person.
Planning Your Office Relocation
Now that you understand the key stages of an office relocation and the cost ranges and factors affecting each. You're able to calculate what your office move will (roughly) cost, and set your budget accordingly. Of course, you have to balance your ideal budget with what is available. While an office relocation is a big investment, it's important to look at it as an investment in the productivity, collaboration, and performance of your staff.
While it's understandable that cost is your primary concern, it's crucial that setting a budget isn't your first step. Before that, you need to understand exactly what you need. First, you need to create a great project brief. This will allow you to set a budget according to what your people and company need, rather than an industry benchmark or an arbitrary budget. This could make your project very difficult and limit the performance of your people and company.
To learn more about moving your office, download the ultimate office relocation guide. You'll find out about relocation costs, timeframes, and explanations, as well as a checklist to make sure your plan has all the necessary bases covered. Download your Office Relocation Guide here.
