The Cost of Moving Office
Is the lease end on your office approaching, and you're planning to move? Perhaps you've completely outgrown your current space and need to find a larger office? If so, one of your many questions will be "What will it cost to move my office?"
Every week, we speak to companies in this situation. They often don't know where to start, and they're feeling slightly overwhelmed by the scale of the project ahead of them. That's completely understandable. Moving office is a big project, and there are a lot of different factors to consider, costs to be incurred, and potential risks.
Unfortunately, we can't definitively say what your office move will cost. There are too many moving parts at this stage. However, in this article, we'll draw on our 15 years of experience designing & building workspaces across the UK. We'll go through all the key office relocation costs, including planning, real estate, legal & compliance, office fit out, and the move itself. By the end, you'll be able to work out what your office fit out might cost.
Of course, setting a budget is only one part of preparing for an office relocation. To get started planning your office move, download your ultimate office relocation guide. There, you'll learn about office relocation costs and timeframes, as well as explanations & breakdowns. We've also included an end-to-end office relocation checklist. Download your Ultimate Office Relocation Guide here.
Planning
It's crucial that you 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 plan needs to include 5 key items: overall 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 will be able to distill your overall strategy into objectives for this specific project. You can then set your key project deadlines, define the specific features your new 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. Landlords will often require 6-12 months rent to be paid upfront. Office rates are calculated per square foot per year. Depending on your office design, your staff will need between 100-200 sq/ft per person, including common areas.
An experienced and well-connected commercial estate agent is essential to finding the right space at the best possible price. Using their network, they are often able to find office space before it comes on to 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 can vary.
The cost of your office rent depends on two key factors: location and quality. In London, lease costs range from £65 to £135 per sq/ft per year, depending on the location and quality. Most other key cities in the UK will cost around £40 per sq/ft per year. To learn more, read How Much Does It Cost To Lease Office Space In London?
Survey & Legal Costs
Once you have found the right space, 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 you may not have included in your budget. 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 £10 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. 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, there are 5 major factors that will control your office fit out costs: size, specification, state, and services.
Size
Size will have the most impact on the cost of your office fit out. Larger projects require much more material and labour to fit out. 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, 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. The costs will vary depending on the above factors, but most removals cost £110-£160 per person.
Planning Your Office Relocation
Now that you know about the key costs associated with moving office, as well as initial cost ranges and what affects that cost, you're able to calculate roughly what your office relocation will cost. We also recommend allowing a contingency of 5-10% to cover any unforeseen circumstances. This allows you to speak to your company's leadership about available funds and set a project budget.
While it's understandable that cost is a key concern, it's crucial that setting a budget isn't your first step. Before that, you need to understand exactly what you need. 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 based on available funds. To do this, you first need to create a great project brief. To learn how to do that, read this article.
To continue preparing for your office move, download the ultimate guide to office relocation. You'll learn everything that goes into an office relocation, what it costs, and how long it will take. Download your relocation guide here.
