Offices of the Future - Cost model, September 1996

Introduction

Construction’s uneven recovery from recession has been led by the commercial sector. New orders in thisarea have risen 14% in the past year, according to the DOE. The demand has been largely from the retail and office sectors. A survey by Chesterton Research revealed that 437 000 m2 (7 million ft2) of office space is under or near to construction In London. Recent proposals for Europe’s tallest office building in the City by Foster and Partners confirm a new level of confidence among developers and investors.

The source of this confidence is demand for a new generation of office space from newly restructured or merged businesses.

Elsewhere development is being driven by low operating costs and space needs for new patterns of working, Office buildings, which represent the second largest expense after staff salaries (10-20%) of revenue), are now viewed as a business tool that should be used to increase productivity and competitiveness.

Office of the 1990s

The contemporary image of the office of the future has changed rapidly from the commercial palaces of Broadgate and Canary Wharf to the distinctive architecture of the “green” building. Green buildings use a combination of depth of floor plate, orientation, high building mass, solar control and natural ventilation to create offices that provide comfortable working environments, are cheaper to run, produce a lower greenhouse gas emissions and provide a flexible environment for work.

Most are located away from city centres where land costs are lower, planning is less restrictive and the environment is friendlier - where there is less noise and pulltion. Buildings such as the Ionica and Powergen headquarters at Thames Valley Park and Coventry, respectively, together with the new Inland Revenue offices at East Kilbride and Nottingham, have become models for a new style of office building. These are characterised by dense construction, extensive solar shading and distinctive features such as wind towers designed to assist natural ventilation. A typical building has floor plates of 1500-2000 m2 and is two or three storeys high.

However, developments have not been limited to business parks. The emphasis is on designing offices with flexible space and environment systems that can actively reduce operating costs and increase organisational efficiency.

UK designers have responded quickly to the demand for office space that is flexible and cheaper to occupy. The “office of the future” is already in use by some owner-occupiers, and it is expected that this will filter through to the letting market over the next two to three years.

General considerations

The office as both workplace and build space is undergoing rapid change. Work patterns are changing, with hotel desking (where people share facilities and don’t go into the office every day) and teleworking (working from home but linked to the office via telephone or modem) becoming more common. Additionally, developers and occupiers are now seeking office space that can accommodate change, actively support the business of the organisation and minimise “churn” - the costly task of moving staff around the office.

Other considerations include:

Letting requirements. The rapid rate of change in the business environment is making 25-year leases unmarketable . Most businesses plan forward over a maximum of five years and an increasing number are willing to pay premium rents for shorter, flexible leases. The ability to subdivide floor plates for multiple occupancy and subletting is essential. Construction to shell-and-core stage is likely to become more common as tenants tailor fit-out expenditure to shorter periods of occupation.

Multiple occupancy. Demand for large headquarters buildings has fallen as core corporate functions have been reduced to processes of control, communication and the management of information. This means the floor space required for company headquarters is expected to be 3700-6500 m2 in the near future compared with the 14 000 m2-plus need of the 1980s. As a result, multiple-tenancy buildings are becoming more popular.

New patterns of working. The 1990s have seen a radical re-engineering of business organisations. This is having a fundamental effect on the way that business is done and how it is supported by the Office. Research by architect DEGW and the Building Research Establishment - New Environments for Working, due for publication in spring 1997 - forecasts a move away from routine, individually focused “process work” to a more complex pattern of interactive group working, This is having a significant impact on office design and space planning (see tables)

At one extreme, process work requires space planning based on a hierarchy of “owned” workstations and cellular offices. Such a work environment is supported by a building plan with uniform deep floor plates and centrally controlled, stable environmental conditions. This form of organisation, termed a “hive” by DEGW, is served very effectively by the archetypal 1980s office with deep-plan space serviced by variable-air-volume air-conditioning. It is, however, wasteful of space, with a typical owned desk being used for only a 40-50% of the working day.

This relatively stable but inefficient working environment is being replaced by a dynamic and interactive pattern of project working can achieve higher overall levels of density and space use by eliminating desk ownership. The characteristic interaction and autonomy of a flexible workforce requires floor plates that provide a range of different interlinked spaces. Intermittent office use and more diverse working arrangements also require a greater degree of local control and flexibility from building services. This can be best provided by distributed systems such as four-pipe fan-coil or mixed-mode ventilation.

The trend into the 21st century will be for a greater degree of group interaction, varying patterns of occupancy and increased occupational density. Whereas many buildings can accommodate a degree of flexible working, the most effective will be those with flexible floor plates, and, in particular, buildings with an atrium or medium-depth floor plate where the distance from window to window or window to atrium is 12-15m.

CHANGES TO BUILDING DESIGN

Conventional

Deep plain
Single occupation
Sealed box
Maximised net lettable area
Flexibility for growth
Extensive services distribution
Ceiling and floor voids
Centralised building management system
Category A fit-out

New
Medium-depth plan
Multiple occupation
Opening windows
Efficient lettable area
Flexibility for change
Structured services distribution
Single services void
Local, simple building management system
Shell and core

CHANGES TO PATTERN OF WORKING

Conventional

Routine, individual taks
Isolated activity
Owned space
Low space use
Single work setting

New
Creative, group tasks
Interactive activity
Shared space as needed
High space use
Multiple, varied work setting

Building services installations. Air-conditioning remains a prerequisite for high rental levels and buildings values. But growing recognition of the suboptimal performance of air-conditioning systems, high running costs and the increasing importance of green issues us putting pressure on this assumption. In practice, air-conditioning is required in only the 10% of office buildings that are sealed against hostile urban environments.

The prospects of further extensions of energy taxation is also contributing to the spread of low-energy technology. The widespread take-up of BREEAM certification (the BRE’s environmental assessment scheme) is indicative of a wide acceptance of the marketing and economic benefits of green credentials. Natural and mixed-mode ventilation have been introduced extensively into office buildings and designed for the public sector or owner-occupiers.

The key features of low-energy design are the use of natural light and ventilation. Natural air movement is improved by limiting the amount of cellular office space, restricting the depth of the floor plate and using features that promote the stack effect, whereby warm air is extracted at high level with cool air drawn in at low level. Use of free cooling stored by building mass has led to the development of a distinctive architecture based on dense materials and exposed structure.Mixed-mode systems use combinations of natural and mechanical ventilation to suit different patterns of use, internal conditions or varying annual climatic conditions.

Building flexibility. Offices of the 1980s are characterised by over-specification of floor loadings, and excessive cooling and small power loads. These requirements were driven by investors wishing to ensure buildings could accommodate the growth forecast in the use of information technology. In practice, IT developments have reduced heat output and cable management needs. The 1980s office worked well on paper, nit it has not necessarily provided tenants with the operational flexibility that can support the continuing adaptation of the work place.

Flexible working

Flexible working makes the best use of the available space, For example, IBM has used this technique to accommodate a 65% increase in staff levels at its Bedfont Lakes office since moving there in 1994. Common types of flexible working are:

• Simplifying space standards - flattening the office hierarchy and reducing the amount of cellular space, so minimising the space required and “churn” costs
• Hot-desking - shared work space available on a first-come-first-served basis
• Hotelling-shared managed work space that are booked in advance
• Activity setting-a range of shared work settings (workstations, meeting areas, quite areas and so on) that are arranged to suit individual or group activities
• Telecommuting-communications of office-and home-based work
• Virtual office-use of IT that allows people to work in any location

Information technology

Research by DEGW and Technibank published in 1992 and call The Intelligent Building in Europe identified potential savings of 10-40% on annual operating sots through IT. The main cost-saving areas identified are security, energy consumption, maintenance and service operations, and layout planning and “churn” costs.

Money spent on IT as a proportion of overall building expenditure has increased from 2% in 1980 to 5% in 1990. The most significant component of IT fit-out costs is the structured cabling, which ranges from £120 to £150 per data point . Allowances should be made for one voice and one data outlet point per 5-10 m2 of lettable space.

Design issues

The British Council for Offices’ Specification for Urban Offices, published in 1994, has not been widely adopted. Institutional investors, in particular, have maintained pressure to retain high levels of specification, especially in connection with floor loadings, air-conditioning and cooling loads. In practice, the published BCO standards have been subject to upward and downward pressure as a result of changing work practices and design innovation.

Occupational density
The average UK space allowance of 15 m2 net/person is being reduced as densities are increased by the introduction of desk sharing and flexible working. However, design density continues to be determined by escape stair requirements (12-14 m2 net/person). Services demand calculations should be based on 14 m2 net/person.

Plan form
Atrium and medium-depth slab buildings with a 15 m window to atrium or window-to-window depth are best suited to support the wide variety of work patterns in the future. A maximum depth of 12 m is suitable for natural ventilation.

Grids
Column grids should be a multiple of the planning grid (typically 1.35 m or 1.5 m). Grids of 6, 7.5 and 9 m remain typical. The BCO does not recommend column grids in excess of 9 m for reasons of economy. The construction of column-free space on an 18 m grid will add £40-50/m2 to overall construction costs.

Floor loadings
The BCO’s recommended level of 2.5 kN/m2 over 95% of floor area has not been generally adopted. Funding institutions in particular have kept to 5 kN/m2, whereas some owner-occupier clients are adopting reduced standards of 4-4.5 kN/m2.

Height dimensions
Floor-to-ceiling heights of 2.6-2.75 m are recommended and are generally acceptable to tenants. The overall slab-to-slab depth will vary according to structure and services - typically ranging from 3.7 to 4.1 m. Alternative ventilation systems will determine the depths of raised floors and suspended ceilings.

Ceiling and floor zones
Typically, 150mm is required for the ceiling/lighting and the raised floor zones. Where a void for ducted services is required, either above the ceiling or below a raised floor, a clear zone of 4501 mm is recommended.

Indoor climate control
Recommendations for climate control are based on the importance of reducing energy consumption and carbon dioxide emissions, Integration of building services and fabric to control the indoor climate is recommended. The BCO suggests that mechanical ventilation/ cooling should be used only to combat noise and air pollution.

Cooling loads
High cooling loads of 25-30 W/m2 have traditionally been specified to build in flexibility. This has led to air-conditioning plant that is inefficient and expensive. However, the BCO’s suggested cooling load of 15 W/m2 is not generally being adopted.

Air-change rates
Rates have a significant impact on running costs, energy use and CO2 emissions because fans and pumps use far more energy than refrigeration systems. The BCO recommends specifying minimal flow rates of 8-12 litres/second/person.

Services zoning
Zones should be designed to support user control and efficient space planning. Perimeter zoning should allow one terminal/6m perimeter. The internal allowance should be one terminal/50-80 m2.

Temperature range
The BCO recommends 22±2°C. Where occupants can exercise control over their internal environment (opening windows, local controls), tolerance levels are higher and therefore a wider operating range could be specified.

Small power
The BCO recommends small power distribution of 25 W/m2. Provision for additional capacity should be made at distribution boards and panels only. Riser capacity should be equivalent to 1-2% of gross floor area.

Lighting levels
The traditional benchmark for internal lighting is 500 lux. As a result of the increased use of glare-free natural light and task lighting, maintained illuminance can be reduced to 350-400 lux.

Construction Costs

Office construction costs vary according to specification, location, market and the extent of developer fit-out. The wide range of air-conditioning and mixed-mode ventilation strategies now available introduces another element of variation, as the balance of capital costs and long-term running costs needs to be considered as part of the development equation. Generally, the amount spent on services, fit-out, IT and equipment is taking up a greater proportion of total capital cost, and shell-and-core costs can now account for only 55% of total construction and fit-out expenditure.

The major cost drivers are still sit footprint, number of storeys, floor plan, wall-to-floor ration and choice of external walling and building services. The additional cost implications of introducing basements, atria and sophisticated control systems should be considered.

Analysis of the building in the cost model

The cost model is based on a four-storey, naturally ventilated office located in a business park in the South-east. The costs are broken down into shell and core and developer’s category A fit-out. The gross floor area is 10 200 m2, with a window-to-atrium depth of 13.5 m, with a net lettable area of 8900 m2. Floor plates are in excess of 2000 m2, wih a window-to-atrium depth of 135 m, which allows three workstation zones.

The building is designed for low energy use, with the main elevations facing north and south. Glazing on these elevations is shaded to minimise glare. Natural ventilation is achieved by opening windows in both the curtain walls and the atrium screens. The building is designed to achieve a “stack effect” in the atrium. A displacement ventilation system is installed to supplement natural ventilation if necessary. Cooling is achieved by passive measures such as high thermal mass, night-time cooling and sun shading. Localised cooling for hot spots such as meeting rooms is provided by fan-coil air-conditioning units.

Rates are based on August 1996 prices for the South-east and for a lump-sum contract. It is assumed that the building is on a Greenfield site, and therefore no allowance has been made for demolition, decontamination work or poor ground conditions. Likewise, the cost to the tenant’s fit-out is excluded.