Eight years after the first cost model was published, Davis Langdon & Everest provides a companion to 17 building types featured in the series. Providing up-to-date costs for each type, this third cost model update includes the publication date of the original model and identifies current cost drivers.

The first Building cost model, published in April 1993, examined supermarket construction costs in detail. Since then, 42 models have been published, covering most building types from airports to multiplex cinemas. The models have also included in-depth examinations of general issues, such as property taxation and value management techniques.
Over the past eight years, the objectives of the series have remained consistent: to provide detailed elemental cost information derived from a generic building that can be applied to other projects; to publish summary cost information for similar building types; to provide a commentary on cost drivers and other design and specification issues; and to identify and discuss suitable procurement routes to secure the client’s objectives.

<b>Tender price inflation</b>
The year 1993 turned out to be the trough of the early 1990s recession, and tender prices started to rise in its second quarter. Since April 1993, tender prices, as measured by the Davis Langdon & Everest tender price index, have risen 54% to a fourth quarter 2000 index value of 373. However, because of changes in design and specification, including the adoption of more cost-effective materials and methods of construction, the costs of projects have not necessarily increased at the same rate as the index. Accordingly, the costs summarised in this update are based on surveys of recent projects, rather than the adjustment of the published costs using the index.
<b>All-in estimating rates</b>
The costs set out in this article are all-in estimating rates. It should be noted that the all-in rates exclude demolitions and site preparation, site abnormals, furniture, fittings and equipment (except where specifically noted), external works and services, contingencies and design reserve, professional fees and VAT.
The cost ranges in the tables do not represent maximum and minimum thresholds, but rather indicate typical design and specification criteria.
The all-in estimating rates should, except where stated, be applied to the gross internal floor area of a proposed development. Rates are current at fourth quarter 2000 price levels, based, in most instances, on a South-east England location. To adjust for other locations, refer to the regional variation table.

<b>Car Parks</b>
Restrictions on total parking provision, set out in planning guidance PPG13, are encouraging retail developers to specify higher space standards in multistorey car parks, making parking easier and improving the turnover and use of parking spaces. Limits on spaces are making greater provision for public transport on commercial schemes necessary.
Environmental enhancements to meet AA Gold star criteria are also pushing up costs. These include lighting to 200 lux, improved signage and orientation, panic buttons and enhanced CCTV security.
<b>Publication date: 7 December 1993

Industrial buildings</b>
Cost drivers include the provision, through a comprehensive services infrastructure, of the flexibility to accommodate changes in process or in space requirements. Other issues that affect cost levels include the quality of the working environment, and the range of amenities required.
<b>17 July 1997

Warehouse and distribution centres</b>
Planning requirements are dictating building height and envelope materials. The increased cost and difficulty of developing brownfield sites, because of land remediation costs, poor ground conditions and so on, is driving up construction costs.
Significant increases in build speed have cut site programmes for 10 000-20 000 m2 schemes to 16-24 weeks. Client fit-out, including requirements for modifications to the base building, also affects costs.
<b>26 August 1994

Business Park offices</b>
Sustainability and cost-in-use issues are increasingly important for corporate owner-occupiers.
On the speculative market, achievable rent levels continue to set tight constraints on construction budgets. Consequently, even developments at the top end of the market are now being designed without atria, and with increased use of natural ventilation rather than air-conditioning.
The provision of high-quality facilities continues to be an important aspect of maintaining business parks’ competitive edge.
<b>6 September 1996; B1 offices, 25 June 1993

West End and City offices</b>
Current cost drivers are:

  • Planning issues, including the impact of conservation areas, preserved rights of light and protected views. The mayor of London is a statutory consultee on developments of strategic importance in Greater London, which may include tall office developments.
  • Floor-plate size and column-free space Continuing consolidation of many commercial sectors, including legal and financial, is maintaining demand for office buildings with large floor plates of 2000 to 3000 m2.
  • Building services installations Significant savings on development costs are being achieved through the rationalisation of building services design, specification and construction, without affecting the performance of the building.
  • <b>14 October 1994; high rises, 9 May 1997
  • Office fit-out</b>
  • Tenants’ modifications and the need for cellular space are two of the main cost drivers. The provision of specialist space, such as conference suites or data centres, also pushes up costs. Another factor is quality levels, including standard of finishes and building services requirements, such as the extent of back-up space provided for essential services or the density of IT points on office floors.
  • <b>19 December 1997
  • Supermarkets</b>
  • Supermarket retailing is a mature business sector. The main store chains are seeking to reduce costs by increasing the use of supermarkets through extended opening hours, home delivery services and a reduction in store floor area devoted to back-of-house activities.
  • The current emphasis on store refurbishment programmes is being driven by a shortage of development opportunities, merger and consolidation, and by the need to revitalise existing brands.
  • Like shopping centres, supermarket construction costs are also being driven up by the increase in town-centre mixed-use development, together with the mixed-use redevelopment of existing prime stores, and by the sprinkler requirement for larger sites.
  • <b>16 April 1993
  • Shopping centres</b>
  • The shift away from out-of-town shopping to pricier town-centre sites has had the biggest impact on design, specification and cost. Linked to this is the growing trend in inner-city development to develop large retail investments as a series of “blocks” linked by open pedestrian routes, rather a single enclosed mall. On a more specific level, retail units with an area greater than 2000 m2 are now required to have sprinklers.
  • <b>30 October 1998
  • Leisure centres</b>
  • Client expectations of the quality of leisure buildings have increased, and the National Lottery has provided funds to develop high-quality schemes. In the public sector, leisure centres are developing a broad community function and need a wider range of facilities and functional spaces.
  • <b>5 May 1995; small-scale public sector arts buildings, 10 July 1998; private sector health and fitness centres, 11 September 1998
  • Theatres</b>
  • The mix of uses required in theatre buildings, particularly non-theatre space, such as galleries, cafe/restaurants and retail, can have a significant effect on the overall cost. The size of the auditorium, multipurpose space or other facilities will also have a considerable impact on scheme costs, as can constraints on the client’s budget, such as the absence or indeed the presence of lottery funding. The quality of external envelope is another feature that dictates overall cost levels.
  • <b>Building Procurement, June 1996
  • Grandstands and stadia</b>
  • The factors increasing construction costs are flexibility in use, bowl design and roof design.
  • More stadia are being designed with retractable roofs or pitches. The gross floor area may increase, relative to its seat capacity, to provide flexible internal spaces that can accommodate all planned uses.
  • Some redevelopments feature a fully enclosed bowl design in lieu of separate side and end stands. Bowl roofs are based on more complex and expensive cantilever or suspended structural solutions, rather than the more commonly used “goalpost” solution.
  • Greater emphasis on a stadium roof’s architectural expression is also causing some increases to grandstand costs.
  • <b>7 July 1999; indoor arenas, 10 September 1999
  • Schools and colleges</b>
  • Key cost drivers are:
  • Public–private partnership – £700m of investment has now been signed up. This aims to provide good-quality teaching space and state-of-the-art IT. PPP encourages a focus on whole-life cost as well as capital investment. The PPP programme is generating substantial new-build work, as well as refurbishment.
  • Energy and environment issues, including passive ventilation and more efficient services installations, which reduce running costs.
  • Requirements to integrate IT systems into new and existing school buildings.
  • Investment in facilities for specialist and beacon schools focusing on technology, languages, arts or sport.
  • <b>6 March 1998; schools, 22 April 1994
  • Museums and art galleries</b>
  • User expectations and design standards have risen significantly since the introduction of lottery funding. Costs have also been affected by the increasing sophistication of environmental controls and security installations, particularly for institutions displaying loaned works, where the ability to comply with potentially strict conservation standards is an important issue in securing the loan. Investment in interactive display technology is also becoming more common.
  • 10 October 1997
  • Libraries and learning resource centres</b>
  • Modern libraries are developing a wider community role, and a wider range of spaces is required to support different uses. IT needs in all libraries continue to expand.
  • High-capacity mobile shelving is more widely used, resulting in greater floor loadings and higher capital costs for the shelving.
  • <b>20 October 1995
  • Social housing</b>
  • Competition for land with the private sector has led housing associations to develop more difficult brownfield sites, which often require land remediation and more complicated and costly substructure designs. Costs are also being pushed up by changing design standards, including the revised disability regulations and the Joseph Rowntree Foundation’s Lifetime Homes standard. The shift towards prefabrication and other off-site assembly techniques and the Housing Corporation’s future requirements to develop social housing according to Egan principles are expected, once the technology and processes are established, to reduce costs.
  • <b>1 May 1998; 27 August 1993
  • Private housing</b>
  • Current cost drivers are:
  • Planning regulations directing developments to brownfield sites, as well as requirements for the inclusion of, and financial contributions towards, the development of affordable housing as part of private sector schemes.
  • Density of apartments, together with vertical and horizontal access strategies.
  • Quality of external envelope and wall-to-floor ratio.
  • Requirements for comfort cooling and the adoption of wet or all-electric heating systems.
  • Quality of kitchen and bathroom fittings.
  • <b>1 May 2000; Building Procurement March 1997
  • Hotels</b>
  • Consumer demand for specification improvements in hotels is driving price rises in the sector. Guests are now looking for larger guestrooms in mid-range hotels, and increasingly expect air-conditioning in lower standard hotels. IT facilities are also being upgraded, with the development of computer suites rather than the established “business centre” format.
  • Statutory requirements for enhanced fire detection and alarm systems, together with sprinklers in some cases, are adding to development cost too. Furthermore, in hotel developments aimed at overseas markets, fire safety provision in excess of statutory requirements is sometimes installed as part of an overall marketing strategy to match customer expectations.
  • <b>Building Procurement, April 1996; budget hotels, 25 November 1994