Europe tops league table of building design fees

Architectural and engineering fees are higher in Europe than anywhere else in the world, a new report has revealed. An analysis of building design fees as a percentage of overall construction costs showed that Europe’s costs were generally higher than those in Asia and the Americas.

Several European countries reported rates of 15-16%, which is four times higher than the average rate in China (see table one). The UK was among them, with a rate of 15%. Spain was the most expensive country for design, with architectural and engineering fees taking up a massive 22% of construction costs, according to the report by QS Faithful+Gould and RSMeans, a US supplier of construction cost data.

Tom Wiggins, senior associate at F+G in the US, said Europe’s higher rates were partly due to “more appreciation of design and what it provides”. In the US, he said, “we don’t have so much affinity for the historic nature of buildings. For example, we don’t mind pulling them down so much.”

The report suggested that Europe’s higher costs were down to a stricter planning regime. It said: “Local requirements for planning permissions, environmental issues and government regulations affect the design effort. Western European countries will require more effort in these areas.” Wiggins added that, in contrast to the UK, in the US “people are interested in seeing things built; the neighbours don’t often come out to protest against a new building because its design is too modern”.

Another factor driving up costs in certain European countries, including Belgium, Poland and Austria, was anti-trust regulations leading to the elimination of fee scales.

The report concluded that design had become a commodity: “It appears that price – whether consumers will admit it or not – is the essential differentiator.”

F+G’s research suggested that cost consulting takes up the largest percentage of overall construction costs in Singapore (see table three). Here, a range of services including cost consulting, project management and planning supervision (grouped together as “other” in the table) accounted for 41% of fees. Architectural fees accounted for 39% of fees in Singapore, structural and civil fees 10% and mechanical and engineering fees 10%.

In the UK the “other” set of services represented a lower slice of construction costs, just 17%. This compares to architectural services commanding 56% of costs, structural and civil engineering 13% and M&E 14%.

In the US people are interested in seeing things built; the neighbours don’t often come out to protest against a new building because its design is too modern

Tom Wiggins, Faithful+Gould

In both the US and China the “other” category accounted for a paltry 5% of construction fees. In the US, architects were found to be taking the lion’s share of fees, 55%, while structural & civils work took up 16% and M&E 24%. In China architectural costs accounted for only 30% of fees, with structural and civil engineering commanding the largest percentage of anywhere in the world, 45%. M&E in China represented 20% of fees.

The report noted that looking at design fees alone did not tell the whole story but added that these fees were a traditional benchmark. It also said local costs and standards of living should be considered. It highlighted four key factors affecting fee levels:

• Building type, size and design complexity

• Scope of services

• Procurement method

• Market for design services.

The survey was based on the typical fee levels seen in each country on the construction of an 8,000m2 owner-built and occupied suburban office building, including tenant fit-out.