Slovak Republic has the third lowest fit out costs in CEE, half of those in Germany and UK

Technology, need for collaboration and sustainability affect future costs

In the comparison of 26 European cities, Bratislava placed the fifth in the CEE region in terms of the price of fitting out an office. Still, with EUR 939 being the average cost per square metre in Bratislava, it is half of what is standard in top German cities or in the UK where the median cost exceeds EUR 2,000.

While discussions are still ongoing about the future of the office, it is obvious that flexible and hybrid model will be the most probable answer. The office is not dead as it has justified its existence – whether to preserve productivity or to support employee interaction and cooperation. With occupancy still exceeding 88,97 percent in Q1 2022, the Bratislava office market is a healthy one, with many companies relocating, expanding or downsizing – which means re-fitting their offices.

Glyn Evans, Head of Design + Build EMEA, Cushman & Wakefield: “Fit out costs are an integral part of the decision-making process, affecting a company’s planning and budgeting. As these – along with staff costs and rents – need to be factored in in the early stages of these strategic decisions, we’ve considered and compared top European locations to guide occupiers through defining their office relocation budget.”

Table 1.: Fit Out Cost (EUR per sq m), CEE countries

Increased costs and market overview

The main reason is the instability in the construction market and the increase in material prices, which is almost daily. In addition to the ongoing pandemic, unfortunately, the war in Ukraine has started to move the scenes even more. “The prices of basic building materials move daily, so even traders and manufacturers do not know what the price will be tomorrow, let alone a week or a month. The prices of energy and fuels are at record numbers, and it is already clear that this will be reflected in the prices of building materials,” says Veronika Špániková, Head of Project & Development Services at Cushman & Wakefield Slovakia.

Although the construction industry has contributed the most to the significant reduction in unemployment in Slovakia in recent years, it is marked by a shortage of skilled labor and all indications are that this is not just a transitional period. We feel the consequences of the weak synergy between the design of the education system, especially at the level of apprenticeship and vocational education, with the needs of the labor market.

Graph 1: Total Indicative Split of Fit Out Costs

Technology, need for collaboration and sustainability affecting future costs

Generally, increase in the costs for audio visual systems is expected, following the rise of online platforms for remote work and the need to equip meeting rooms adequately, coupled with the increasing supply shortage for electronic parts.

The shift to a to a more agile workspace is increasing the cost of designing and creating an office. However, flexible working practices as resulting in consolidation and downsizing trends, meaning less space is being taken, balancing out the increase in fit out costs.

With buildings responsible for around 40% of the global CO2 emissions (construction and operation), sustainability is becoming increasingly important in fit outs. Enhancing sustainability during a building fit out not only benefits the environment, it can also have measurable financial benefits. To demonstrate sustainable fit out, various sustainability and wellbeing certification standards can be used such as BREEAM LEED or WELL.

Glyn Evans, Head of Design + Build EMEA, Cushman & Wakefield: “Building certifications can add cost initially, but they also provide a clear, holistic approach and act as independent verification of achievements against a recognised standard.”