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There is no universal cheaper answer. Refurbishment usually starts with a lower capital outlay because the structure and much of the envelope remain, while a new building can offer better performance, longer remaining life and fewer constraints. The correct choice emerges only after both options deliver the same usable area, occupancy, comfort, flexibility, energy target and completion date, with acquisition, disruption, renewals, operating costs and carbon assessed on the same basis.
The figures below are UK commercial-office appraisal guidance anchored to published Central London benchmarks. They are not universal UK prices, a tender, or a controlled like-for-like lifecycle comparison. Existing-building condition, location, specification and scope can move the result materially.
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A cost model should compare two clearly defined schemes rather than a light refurbishment with a high-specification new building.
Option A: retain and refurbish
Include every intervention needed to provide the agreed office service: surveys and enabling works; structural repairs or strengthening; façade and roof work; insulation and airtightness measures; replacement windows where required; heating, cooling, ventilation, electrical, life-safety and controls upgrades; lifts and accessibility; landlord and tenant fit-out; renewable-energy systems; commissioning; and compliance works. Record which existing elements are retained, their tested condition and their expected remaining life.
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Option B: demolish and build new
Define a new building with the same usable area, occupancy, quality, service performance, energy target and required handover date as the refurbishment option. Include demolition, site clearance, temporary works, abnormal ground conditions, foundations, structure, façade, building services, fit-out, commissioning and all sustainability measures. A larger or more efficient new building is not a fair comparator unless the additional value is reported separately.
Freeze the basis before pricing
- Gross internal floor area (GIFA), net usable area and efficiency ratio.
- Location and planning context, including heritage, rights of light and party-wall constraints.
- Price base date, procurement route, contract form, programme and phasing.
- Occupancy density, operating hours, comfort criteria, IT and specialist loads.
- Specification, certification targets, energy model, carbon factors and grid assumptions.
- Decanting, temporary accommodation, lost rent, insurance, finance and risk allowances.
- Whether professional fees, VAT, planning contributions, utilities and facilities-management costs are included.
Keep acquisition and enabling costs separate from construction. The same rule applies to demolition, decanting and abnormal works: show them explicitly rather than hiding them in a single rate.
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Knight Frank Cost Consultancy’s Spring 2025 guide gives indicative Central London rates. The guide states that the rates exclude professional fees, Section 106 costs, Rights of Light, Community Infrastructure Levy (CIL) payments, utility upgrades, insurance and VAT. A premium may apply to new buildings below 50,000 ft². These are benchmarks for early appraisal, not quotations.
| Work category | Indicative rate | Scope and qualification |
|---|---|---|
| Cat A refurbishment | £150/ft² | Indicative Central London landlord refurbishment benchmark, Spring 2025 |
| Major refurbishment | £250/ft² | Indicative Central London benchmark, Spring 2025 |
| Building repositioning | £300/ft² plus | Indicative Central London benchmark; final scope can exceed this level |
| New build — low scenario | £400/ft² | All-electric-services scenario with lower structure, façade, plant, finishes and sustainability assumptions than the higher scenarios |
| New build — medium scenario | £500/ft² | Indicative Central London all-electric new-build scenario |
| New build — high scenario | £600/ft² | Indicative Central London all-electric scenario with higher specification and sustainability provision |
Knight Frank also reports regional factors relative to London, from approximately 10% lower in the South East to 30% lower in Wales, with other regions between those points. Applying a factor does not turn the London figures into a tender: labour markets, logistics, site constraints, procurement and specification still require local validation. Do not compare a £150/ft² Cat A rate with a £500/ft² new-build rate as though they were equivalent buildings; they describe different scopes and service lives.
Use targeted retrofit allowances carefully
The same guide lists selected energy and fabric measures. Each uses a different denominator, so adding the figures produces a misleading “total retrofit rate.” Obtain an EPC and building-specific design before budgeting a package.
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| Measure | Indicative allowance | Denominator |
|---|---|---|
| Replace gas boilers with air-source heat pumps | £10–£20/ft² | GIFA |
| LED lighting with smart controls | £10–£15/ft² | GIFA |
| Roof finish replacement with added insulation | £3–£7/ft² | Roof area |
| Triple-glazed replacement windows | £10–£25/ft² | Glazing area |
| Air-permeability testing and remedial works | £1–£10/ft² | GIFA |
For example, a window allowance cannot be multiplied by GIFA, and a roof allowance cannot be multiplied by net internal area. Surveys should establish quantities, access, asbestos and fire-stopping requirements, electrical-capacity limits, plant-room space and whether the existing structure can carry new equipment.
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Build a whole-life cost model, not a capital-cost league table
Cost groups to include
Use the lifecycle categories described by the RICS International Cost Management Standard (ICMS): construction, renewal or replacement, operation, maintenance and end-of-life. Add acquisition, enabling, professional, statutory, finance and occupancy costs where they affect the decision.
- Acquisition and enabling: purchase price, surveys, legal costs, demolition, clearance, temporary works and abnormal ground conditions.
- Construction: shell, structure, envelope, services, fit-out, commissioning and sustainability systems.
- Professional and statutory: design, project management, cost and carbon consultancy, planning, building control, Section 106, CIL, utilities, insurance and VAT.
- Occupancy and disruption: decant accommodation, storage, moving, temporary services, lost rent and tenant incentives.
- Renewal and maintenance: plant replacement cycles, façade and roof renewals, controls, lifts, finishes and planned maintenance.
- Operation: electricity, heat, cooling, water, cleaning, security and agreed facilities-management items.
- End-of-life: strip-out, demolition, waste treatment, remediation and salvage assumptions.
State whether each item is included, excluded or treated as a separate cash flow. A low refurbishment cost can be overwhelmed by early plant replacement, poor energy performance, repeated decants or a short remaining building life.
What an existing published example shows
An anonymised RICS/Faithful+Gould worked example uses a Q1 2019 base date. It is a demonstration of cost structure, not a current rate and not a controlled low-carbon comparison.
| Case | Area | Construction cost | Total lifecycle cost | Other reported items |
|---|---|---|---|---|
| New build | 12,000 m² | £25.5 million | £69.2 million over 30 years | Land excluded |
| Acquire and fit out | 11,800 m² | £5.5 million | £66.9 million over 30 years | £18.5 million acquisition cost, excluding finance |
The areas differ, acquisition is treated only in the alternative, and end-of-life is out of scope. Renewals, operation and maintenance are reported separately. Use the example to design your model, not to claim that refurbishment is always cheaper.
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Discounting and sensitivity
Declare the study period (for example, 30, 40 or 60 years), whether figures are current or future cash, inflation assumptions, discount rate and net-present-value (NPV) convention. Keep nominal energy-price escalation separate from general inflation. Model replacement dates rather than assuming all components last for the study period.
Run sensitivities on the variables most likely to change the decision:
- Existing structure, façade, roof, asbestos and services condition.
- Scope of energy and fabric upgrades and the performance they actually achieve.
- Energy prices, demand, operating hours and grid-carbon trajectory.
- Plant, controls, façade and fit-out replacement cycles.
- Carbon price or other policy costs, if used, with the assumed start date and escalation.
- Programme delay, decant duration, finance and lost-rent exposure.
- New-build premium for constrained sites and refurbishment contingency based on evidence quality.
Apply comparable risk treatment to both options. Existing-building uncertainty may be greater, but assigning a large contingency only to refurbishment can manufacture a result.
Assess carbon beside cost
Use a declared whole-life-carbon method
The second edition of the RICS Whole Life Carbon Assessment standard is mandatory for RICS members from 1 July 2024. It covers embodied and operational carbon for new and existing assets, aligns reporting with ICMS 3 cost categories and requires a contingency allowance that varies by assessment stage and data quality. The standard and implementation material are available through the RICS whole-life-carbon hub.
Report at least upfront embodied carbon, whole-life embodied carbon and operational energy and carbon over the same reference period used for cost. Document the energy model, occupancy, replacement assumptions, electricity-generation mix, grid trajectory, refrigerant treatment, carbon factors and end-of-life scenario. Carbon and cost are parallel decision measures; one cannot be substituted for the other.
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Why retention often helps, but not automatically
LETI’s Retrofit Unpicker explains that demolition and rebuild will usually have higher initial embodied emissions than retrofit because existing structure and fabric are discarded. A new building can nevertheless achieve lower operational carbon, while a deep retrofit can often approach similar operational performance. Extensive retrofit work can itself be carbon-intensive. LETI recommends a technically robust, like-for-like comparison with transparent assumptions and uncertainty, and says value to users and the community, heritage, functionality, comfort, flexibility, climate resilience, biodiversity and water also matter.
Evidence from two office projects
A RICS account of 1 Finsbury Avenue reports that structural strengthening and adaptation produced 5% of the upfront embodied carbon of a typical new development, while the physical works were less than 10% of the whole-building embodied carbon of a typical new build. The project retained most of its façade and 90% of central plant after testing, and improved its EPC rating from E to B. The result depended on detailed structural analysis and plant and façade appraisal; it is an illustration of potential, not a typical saving or a cost guarantee. See the RICS case study.
A separate RICS account of the fifth-floor refurbishment at 55 Colmore Row reports 73.6 kg CO₂e/m² at stages A1–A5, compared with an approximate fit-out average of 120–130 kg CO₂e/m². Reusing ground-floor materials on the fifth floor saved 8,126.35 kg CO₂e in A1–A4. The assessment excluded B6/B7 operational energy and water, so these figures describe fit-out embodied carbon, not whole-office lifecycle performance. Details are in the RICS project account.
Budget the carbon and design assessments
Assessment fees are small compared with construction but should be visible in the appraisal. MHCLG’s 2025 industry questionnaire reported these mean estimates:
| Assessment scope | Mean fee estimate | Respondents |
|---|---|---|
| Early-design carbon assessment | £3,700 | 158 |
| Design optioneering | £5,200 | 157 |
| Upfront carbon | £7,500 | 150 |
| Embodied carbon | £8,100 | 151 |
| Whole-life carbon | £9,600 | 150 |
These are assessment costs, not construction rates, and the sample is an industry questionnaire. The government summary says further research is needed to establish the cost-benefit of industry-wide embodied-carbon reductions under achievable scenarios. It records that “the cost benefit of reducing carbon may offset the cost of introducing carbon assessment requirements,” while noting that the evidence is not yet sufficient to quantify that benefit across all new buildings. Read the MHCLG executive summary for the stated limitations.
A practical appraisal workflow
- Set the service brief. Agree usable area, occupancy, hours, comfort, flexibility, accessibility, energy target, carbon target and handover date.
- Survey the existing asset. Commission structural, façade, roof, MEP, fire, asbestos, drainage, utilities, measured-building and condition surveys. Record intrusive-survey limitations.
- Define two coordinated designs. Develop a refurbishment scheme and a new-build scheme to the same functional brief. List retained, replaced and new elements.
- Prepare elemental cost plans. Separate acquisition, enabling, demolition, construction, fit-out, professional fees, statutory charges, utilities, insurance, VAT, finance, decanting and risk.
- Model energy and carbon. Use the same occupancy and weather assumptions. Report upfront embodied, whole-life embodied and operational results, with replacement and grid assumptions.
- Set the lifecycle basis. Choose study period, inflation, discount rate, NPV method, component lives, energy-price scenarios and end-of-life treatment.
- Price disruption and timing. Include decant space, temporary works, phasing, lost rent, landlord contributions, planning time and programme risk.
- Stress-test uncertain items. Run low, central and high cases for condition, energy, replacement, carbon price, programme and scope.
- Make the decision transparently. Present capital cost, lifecycle NPV, upfront and whole-life carbon, operational energy, residual risk, programme, functionality, occupier value and remaining life in one decision paper.
Common modelling failures and how to prevent them
- Mixing denominators: Label every rate as per GIFA, roof area, glazing area, net area or another basis.
- Using a fit-out rate as a building rate: Keep Cat A, major refurbishment, repositioning, tenant fit-out and complete new build in separate lines.
- Comparing different areas: Show GIFA, usable area and efficiency for both options; explain any intentional difference.
- Omitting excluded costs: Put professional fees, VAT, Section 106, CIL, rights of light, utilities, insurance, finance, demolition and decanting in an exclusions register or separate allowance.
- Assuming refurbishment is automatically low carbon: Quantify new steel, concrete, façade, plant, finishes and waste; do not credit retention without checking what is actually retained.
- Counting operational savings twice: Reconcile the energy model with maintenance and replacement assumptions, controls strategy and occupier behaviour.
- Ignoring performance gaps: Test whether the retained structure can accommodate insulation, airtightness, ventilation, heat pumps, electrical capacity and overheating mitigation.
- Hiding uncertainty: State survey coverage, data quality and contingency basis; update the model as intrusive information arrives.
- Choosing on carbon alone: Include comfort, flexibility, heritage, resilience, biodiversity, water, community value, programme and residual life alongside carbon.
Decision table for the investment paper
A concise final comparison should show the following fields for each option and identify which figures are estimates, allowances or measured data.
| Decision axis | Refurbishment record | New-build record |
|---|---|---|
| Capital cost | Construction, enabling, fees, statutory costs, decant and risk | Acquisition, demolition, construction, fees, statutory costs, finance and risk |
| Whole-life cost | Renewals, operation, maintenance, end-of-life and NPV | Renewals, operation, maintenance, end-of-life and NPV |
| Carbon | Upfront, whole-life embodied and operational carbon | Upfront, whole-life embodied and operational carbon |
| Operational performance | Energy demand, comfort, overheating and maintainability after works | Energy demand, comfort, overheating and maintainability at design performance |
| Risk | Condition, hidden defects, interfaces, occupied works and approvals | Planning, ground, demolition, utilities, supply chain and commissioning |
| Programme | Phasing, decant, temporary works and access constraints | Demolition, construction, approvals and commissioning |
| Functional value | Floorplate, floor-to-floor height, flexibility, accessibility and remaining life | Efficiency, adaptability, floorplate, flexibility and design life |
The preferred option is the one that meets the agreed service and performance brief at an acceptable whole-life cost, carbon outcome and delivery risk. A headline £/ft² number is an input to that decision, not the decision itself.
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