Cost model: small projects

Introduction

This cost model examines a diverse group of buildings - a car showroom for the private sector, a community building likely now to be built by a voluntary or charitable organisation and a small school extension, which may become typical of education building work undertaken in the coming years.

Education may have helped to boost construction work last year but the market remains intensely competitive with little hope of overall improvement this year or even next as the public sector cuts begin to bite and the private sector shows little sign of stepping in to fill the void.

At the same time, materials price increases make it difficult for contractors to cut costs further.

Car showroom: background

After several good years during the 2000s, the motor industry was hit very hard by the economic downturn that began in 2008. Demand for new cars dropped off almost overnight, used car values plummeted, and repairers were hit as motorists saved money by missing out on routine servicing.

In 2009, the government introduced a temporary “scrappage” scheme to help prop up the industry. The scheme ended in 2010, but many manufacturers extended it with their own “swappage” discount schemes.

Despite the efforts of the government, conditions remain difficult for the industry and are likely to stay this way until the economy picks up significantly. Further
steep rises in fuel prices seem inevitable and are likely to add to the difficulties.

In 2008, the government introduced a new system of road tax, with punitive higher taxes for the worst polluting vehicles. This change coincided with a sharp downturn in the economy and soaring fuel costs, and the car retailing industry was plunged into turmoil. Demand for larger cars like SUVs in particular went into freefall, wiping millions of pounds off the value of the used car market almost overnight.

An additional “showroom tax” came into effect from 1 April 2010, payable on top of the usual vehicle excise duty rate, penalising vehicles with higher CO₂ emissions up to £515 for the worst offending cars.

In 2010, the UK new car market saw new registrations of just over 2 million, the second lowest volume since 1995, despite the government scrappage scheme, which
accounted for 107,000 registrations. In the first two months of 2011 new car registrations were down 10.2% compared with the same period of 2010, which benefited
from the scheme.

The Society of Motor Manufacturers and Traders now forecasts that sales in the first half of 2011 will be 8.3% lower before picking up in the second half of the year. The forecast is that 2.4 million new vehicles will be registered during 2014, a rise of 18% over 2009.

Car showroom: cost model

Delivering compliant buildings that meet manufacturers’ design codes can be a challenge. While occupancy-related cooling loads are not a major issue, loads related to solar gain are. Measures taken to mitigate loads, energy usage and carbon emissions include:

• Use of extended eaves, brises-soleil and canopies to reduce solar gain, particularly related to the main showroom facade
• Use of rooflights to provide basic levels of illumination without adding to cooling loads
• Enhanced insulation to solid cladding and roofs
• Lighting control
• Offsetting relatively high carbon emissions in a mechanically cooled showroom across the total floor area of a development, which includes workshops and so on with lower loads.

The model building has a total floor area of 1,200m², of which 580m² is workshop, 420m² showroom and 200m² office space, toilets and kitchen. The level of specification is targeted at a mid-level car dealership, generally built to achieve a BREEAM “good” level of performance and 2010 Building Regulations.

No allowances have been made for renewable energy sources.

There is a reinforced in-situ concrete ground-bearing slab, steel frame with reinforced concrete pads and full-height glazed walling to the showroom frontage and aluminium micro-rib composite cladding system to the side walls with aluminium standing seam roofing. There is full comfort cooling to all areas and the cost of the fit-out for the comfort cooling and display lighting is included.

Occupancy times for heating and cooling requirements are assumed at normal retail trading hours. Lighting levels in the workshop areas are generally 300 lux which gives operatives a sufficient light level while working on the vehicles with minimal use of task lighting. External works consist of car parking, forecourt display area, landscaping and drainage.

The unit rates are derived from competitive design-and-build tenders and are current at first quarter 2011, based on a South-east location.

The cost excludes franchise specified work, enabling works, demolitions, professional fees and VAT. Design fees are typically in the region of 10 to 12%.

Community centre: background

Planning and design
Community buildings need to satisfy a wide variety of functions such as meetings, childcare, exhibitions and dances.

Financial viability will depend on the facilities being let out to other organisations, so it is important to consider at the planning stage what activities could be accommodated. For a self-contained facility it is important that the unit is easy to maintain, as upkeep funds tend to be very low.

The entrance needs to be large enough to accommodate a sudden influx of people at the start and end of activities. Signposting must be clear. Rooms should be of differing sizes and large rooms should be able to be divided using folding partitions, and improved sound reduction will be required. There should be a domestic-sized kitchen with enough space to manage final preparations for catered events.

Funding
Fundraising for building or refurbishment of a community building is a challenge. It can take 2-5 years from preparation of initial plans to starting work and involves a great deal of planning, research and co-ordination.

With public funding limited, funders can only give money to projects deemed to be a priority for that area. Extensive market research and feedback from users can show how important your project is to local people.

It is also important to link the project to wider agendas such as government or national policy making, for example health and positive activity for young people.

Community centre: cost model

The building has a total floor area of 860m2 at a cost of £1,237/m² and is generally built to achieve a BREEAM “very good” level of performance and to comply with 2010 Building Regulations standards. No allowances have been made for renewable energy sources.

Main structure consists of a reinforced in-situ concrete ground-bearing slab and steel frame on reinforced concrete pads. External walls are a mixture of facing bricks at ground level with render above. The main entrance consists of a fully-glazed entrance screen. The roof is a single-ply warm roof construction with a small amount of patent glazing. The external works generally consist of block paving and soft landscaping.

The unit rates are derived from competitive design-and-build tenders and are current at first quarter 2011, based on a South-east location.

The cost excludes enabling works, demolitions, professional fees and VAT. Design fees are typically in the region of 10 to 12%.

School extension: background

For the last 18 months, education building has accounted for about 14% of all new construction work in Great Britain. That is about to change. Under the Comprehensive Spending Review, capital expenditure for education is set to fall from £7.6bn in 2010/11 to £4.9bn in 2011/12 with further falls over the following two years.

With the abandonment of the Building Schools for the Future programme it seems likely that the new emphasis will be on much smaller projects and refurbishment rather than rebuilding. At the same time the free schools programme seems likely to be dominated by the refurbishment and conversion of existing buildings rather than complete new builds.

This change in emphasis may reverse the trend of school building projects being packaged into tranches and undertaken by medium and large-scale contractors, with opportunities once again for smaller contractors suited to smaller, one-off projects and benefiting from the localism agenda.

New developments are more likely to involve upgrading existing facilities and adding extra space by extending rather than demolition and rebuild.

School extension: cost model

The model is for a small secondary school extension, providing a new science block with two teaching rooms. The building is a two-storey block providing additional floor area of 200m2, attached to an existing building.

The model assumes good ground conditions enabling simple strip foundations. The need for piled foundations would result in additional cost. The upper floor construction is of precast concrete planks and the extension has a warm roof construction finished with a single-ply membrane. The external elevations are of facing brick at the lower level with timber cladding at the higher level, with double-glazed aluminium windows and doors. Internal subdivisions are of blockwork.

Finishings consist of painted plastered walls, vinyl flooring and acoustic suspended ceilings. Allowance has been included in the model for science laboratory furniture and has also been included in the building cost for alteration work at the junction of the existing building. Just 12% has been included for preliminaries, reflecting current competitive market conditions, but 7.5% has been included for contingencies as a realistic allowance for working in conjunction with an existing building.

The building cost (excluding external works) works out at £1,616 per m2. External walls, windows and doors account for 20% of the cost, a function of the relatively small space being provided. Window sizes are maximised to reduce the requirement for artificial lighting during daytime. The model assumes all building works can be undertaken during normal working hours.

Buildings of this nature will usually be tendered on the basis of specification and drawings and are likely to use a JCT intermediate form of building contract between the employer and main contractor. The contract period will be of the order of six months.

Location factors

All the models exclude the cost of demolitions, site preparation, abnormals, loose fittings and furniture, professional fees and VAT. The figures in all three cost models represent competitive first quarter 2011 costs, based on a South-east location. The costs can be adjusted to other regions by using the above indicative location factors (it should be remembered that costs within a region can also vary quite widely) related, in particular, to city centre or remote locations.