MAIN STREETS ACROSS THE WORLD 2023
Bucharest, March 2023: The average office fit-out costs increased by around 20-30% in 2022, due to rising prices, supply chain disruptions, higher commodities and materials’ costs, but also as a result of the increased labor costs. Therefore, companies incurred average expenses of €820 per sq. m of office space, according to data from the Cushman & Wakefield Echinox real estate consultancy company.
The budgets can range from €600 to over €1,200 / sq. m depending on the project complexity, the materials and the solutions used, but also on the technical and security systems which have been implemented. The costs related to fit-out works, architecture and installations (50%) and those pertaining to furniture (30%) have the largest shares in the total cost, while also being the most impacted ones by the price increases. Audio-video (AV) and IT systems, as well as project management and design services, are the other major components of any office fit-out project.
Ana Stroie, Business Development Manager – Project Management Department, Cushman & Wakefield Echinox: ”The price increases determined by the supply chain disruptions and the difficulties related to the shortage of specialized work force, have had a strong impact on the office fit-out costs. In this context, we have noticed an increasing demand for project management services, as companies are becoming aware of the benefits of hiring a project manager to oversee the implementation of the fit-out process. This significantly helps in terms of reducing the risks associated with delays and budget overruns, while also ensuring that the most up-to-date and efficient solutions in terms of sustainability standards are used.”
Fit-out costs in Romania remain among the lowest in the Central and Eastern Europe, and the outlook is positive, considering that there are no longer any major supply chain issues, and prices have also stabilized.
The budgets that companies are willing to allocate for their office fit-outs will continue on this upward trend, as the need for adopting flexible work models, with a greater focus on collaborative, green spaces will require additional investments.
In order to meet all these requirements, companies assign financial resources for AV and technology systems which are meant to enhance the collaboration between the employees working remotely or from the office, and also for workplace solutions that provide flexibility such as moveable walls, lockers, and portable interactive screens or phone booths.
The project management services involve the management, coordination, and supervision of fit-out projects (office, retail, residential, mixed-use, industrial and logistics) together with the design team, consultants and entrepreneurs for all the main stages of the project.
The Cushman & Wakefield Echinox Project Management Department has carried out projects with a total area of 560,000 sq. m representing office, retail, industrial and logistics spaces over the last two years, both for landlords and tenants. The completed office projects involved a budget of around €60 million.
The increasing demand for project management services has been driven both by large tenants, which either contracted new spaces or reconfigured their existing premises as a result of the adoption of the hybrid work model and the diversification of the facilities offered for attracting and retaining employees in offices, as well as by smaller companies, which have also started to be more and more active in the office rental market.
A growing interest has been noticed from small and medium-sized companies with 50-100 employees, tenants which have relocated from B-class buildings or villas to A-class offices, and which are actively investing in designing and setting up their workspaces in line with the higher standards of these buildings.
Cushman & Wakefield Echinox is a leading real estate company on the local market and the exclusive affiliate of Cushman & Wakefield in Romania, owned and operated independently, with a team of over 80 professionals and collaborators offering a full range of services to investors, developers, owners and tenants.
Cushman & Wakefield, one of the global leaders in commercial real estate services, with 50,000 employees in over 60 countries and $ 9.4 billion in revenue, provides asset and investment management consulting services, capital markets, leasing, properties administration, tenant representation. For more information, visit www.cushmanwakefield.com