How much will my construction project cost?
Construction project costs can vary wildly depending on many different factors. Here we are going to talk you through how to work out a ballpark budget for your building project, show you some sample costings, and let you know how much you might expect to pay for a project manager. (Spoiler alert: our day rate starts at £425.)
So, how much will it cost to build my project?
Unsurprisingly, the first question we are ever asked by prospective clients is ‘how much will it cost to build?’. The short answer is ‘well, it depends’. There’s no such thing as an average project because even the simplest build has so many variables.
That isn’t very helpful for you though, is it? Don’t worry, we can talk you through how to estimate your ballpark construction costs using a basic formula.
Set the right budget for your planned construction project.
You need to know whether your project is going to be affordable and justifiable before you spend time, effort and money getting plans drawn up and choosing your fixtures and fittings. Last year we were approached by a prospective new client, Mr X, who was looking for a project manager to oversee his project from the tender stage right through to completion. Of course we were only too happy to help.
Mr X was very excited about the new office he had planned. His architect had designed something beautiful for him. Breathtaking. Everything he had dreamed of. Unfortunately, Mr X and his architect had never discussed the budget. Mr X had no idea what his new office might cost, so the first thing he asked of us was to estimate it for him. We looked very hard at the specifications and researched the best value marble tiling and the cheapest gold taps (I exaggerate, but you know what I mean) but to build according to the plans could not be achieved for under £2 million. Mr X’s budget was £500 thousand. Needless to say, he was devastated and the project was canned.
Establish your building project brief.
We felt bad for Mr X. He knew what his budget was but his lack of previous construction experience meant that he had no idea that the office of his dreams was going to be unaffordable. Worse, he’d spent money on an architect who was more interested in including his every requirement, rather than designing something he could actually afford to build.
Establishing the brief is the most important stage of the project process. Getting this right means that everyone on your project team will know exactly what you’re trying to accomplish and what your constraints are. This will greatly increase your chances of getting a building design that not only offers all the functionality you want but also fits your budget. Follow our step-by-step guide to establishing your brief.
Setting your budget must be done when deciding your brief but of course it’s hard to do that without plans and a quote. If you have never commissioned a construction project before, it’s understandable that you won’t have any idea how much it might cost. Let us help.
How to estimate construction costs.
You can work out a rough estimate of how much your construction project will cost by finding a similar project in Spon’s Architects’ and Builders’ Price Book and multiplying it by the area you intend to build.
Here are some examples from the 2019 edition:
Please remember that this is only a rough guide, and the eventual cost will be decided by any number of choices you make, but it’s a realistic starting point for establishing affordability.
How much will you pay for a construction project manager?
You will almost certainly need to hire in some level of professional services for your building project and this should be included in your budget. If you need a full professional services team including architect, quantity surveyor, project manager, building regulations and specialist consultants, then you should expect to allocate up to 14% of your budget.
The cost of a project manager is normally negotiated as a percentage of the total project budget. As a general rule you should expect to pay 2.5 to 4% of the total budget, depending on the level of service required. So, if you wanted a basic service for your basic office fit out, as in the chart above, you should expect to pay somewhere in the region of £11,400 for project management. The highest level of service for the business park office above would incur project management fees of around £363,100.
If you would rather hire a project manager by the day, the rate for an Iconic project manager starts at £425 per day. You would normally expect to pay a day rate if your project is very large or complicated and you want to have a project manager seconded for a period of time.
To help you imagine what your project might cost and how much you might spend on project management, here are some real world examples of projects we have completed in the past.
Sample project: office refurbishment in Central London.
Our client’s five-storey office building in London was beginning to look tired. They decided to do a full refurbishment of four of the floors to make better use of the space and install the latest technology to boost staff productivity.
A wealth of improvements was ordered to enhance the appeal and functionality of the building, providing a mixture of office space and facilities.
Iconic Project Management were appointed to act as project manager and employers agent, overseeing the whole project. We managed the contractor, the professional team, and internal suppliers for the client. This included AV engineering, IT, food and security.
Improvements to the reception area included improved access from the street, a new reception desk, new branding, and a spectacular interactive display wall. It even had a bike storage feature.
A new multimedia events space was laid out as a formal presentation auditorium with fabric dressing, improved acoustics and lighting and a fabulous LED tiled wall. In total there was around £500k worth of new technology. Each of the office floors was refurbished to provide a mixture of space and facilities. Every floor now has lounge space, office space and meeting rooms. The tired old kitchenette and telephone booths were removed and replaced with a stylish kitchenette/bar.
A second events space was set up with softer furnishings to make it comfortable for workshop presentations. There was also a large classroom, a breakout space and a library plus several global video conferencing rooms.
The client had particular requirements regarding privacy and security so the office space had glass partitions and the acoustics were engineered to provide adequate privacy.
The total cost of this office refurbishment was £1.8 million of which £72,000 was spent on project management fees.
Sample project: restaurant fit out in Gloucestershire.
Our client had an aspiration to rapidly expand their quick service restaurant brand across the UK. As part of this programme, they had acquired a property in Gloucestershire that had previously been a pizza restaurant. The building required a full fit out to turn it into a drive-thru restaurant for our client.
Iconic Project Management led the design and planning stages of the pre-contract and procured the main contractor. We also managed the utilities suppliers, making sure the restaurant had sufficient power, water, data, etc. Finally, we managed the construction of the project from beginning to close out and hand over.
The construction phase of the project involved making appropriate modifications to the existing building at the site. A drive-thru lane was created and the car parks was resurfaced. External areas had both hard and soft landscaping.
A number of operations elements needed to be managed including installing the correct signage, order and menu boards, and making sure that the drive-thru lane had the correct height limiter; making sure that no oversized vehicles could access the drive-thru lane and get stuck.
Iconic also coordinated all the direct contractors who were providing furniture, internal marketing, kitchen equipment and joinery, freezers and chillers, etc.
The total cost of this drive-thru restaurant fit out was £500,000 of which £12,500 was spent on project management fees.
Sample project: student accommodation building in Oxford.
Our client's brief is to create two new buildings of four storeys each. They will provide 54 student bedrooms built to the ultra-low carbon, passivhaus standard. In addition, there will be a podium garden with paved and planted areas as well as improvements to an existing college garden and links to the main college site.
Iconic Project Management have been appointed as employers agent and project manager for this new build. We are responsible for the overall governance of the construction which means that we are coordinating the team, communicating with the stakeholders and exercising control to ensure that the project will be delivered on time and on budget.
The budget for this student accommodation project is £11m of which £170,000 will be project management fees.
Get a quote.
As we’ve seen, it is possible to work out roughly how much your construction project will cost if you have a copy of Spons, a calculator and a tape measure. Hopefully the sample case studies helped you to imagine what the project management fees for your building project would be.
To get a firmer idea of how much a project manager will cost for your construction project, please get in touch and we will be delighted to help you with a no-obligation quote.