Bouwdata

Project development is anything but simple. With construction costs often surpassing 60% of the total budget, many developers take a shortcut, relying on rough per-square-meter estimates. But here’s the catch: despite constant complaints about inaccurate data and poor budget control, this flawed approach persists.

So why do so many fall into the same trap? And more importantly, how can you avoid it? In this article, I’ll break it all down and show you a smarter way forward. Don’t let bad estimates cost you big!

There are two key aspects we need to address: determining the quantities and assigning accurate costs to them.

In 2022, the Flemish Government Agency for Facility Management published the whitepaper “A Clear Framework for Cost Tracking and 5D BIM” to tackle these challenges. To support the methodology outlined in this whitepaper with sufficient data, the BouwData Datapool Element Clusters was created.

Now, nearly three years later, we can evaluate its impact and draw some conclusions.

Requirements for Floor Area

It is essential that the architect receives clear guidelines. In the whitepaper, we propose a specific methodology based on EN 15221-6 for Facility Management, a standard that has now been adopted in almost every European country.

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1. The first step is to determine the Net Room Area (NRA) that generates direct revenue, known as the Primary Area (PA). In addition to the PA, there are also spaces that do not directly generate income but are necessary for the PA to function properly, such as circulation areas (CA), amenities (AA), and technical areas (TA). It is crucial to contractually define the ratio of these secondary spaces to the PA upfront, as this has a significant impact on the overall investment and can easily exceed 30%. This ratio constitutes the first requirement.
   Together, the PA, CA, AA, and TA make up the total Net Room Area (NRA,A) of climate-controlled indoor space.
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2. These spaces are enclosed by walls, both load-bearing and non-load-bearing. A percentage must also be defined here. For simplicity, 10% is often used, but cost analyses show that this figure is typically closer to 15% and can exceed 20% in heritage projects. Since these square meters also need to be built and therefore incur costs, it is essential to establish a sharp yet realistic percentage in relation to NRA,A.
   This forms the second requirement.
   The sum of the NRA and the enclosing walls defines the Gross Floor Area type A (GFA,A) – the climate-controlled indoor space.
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3. Architects aim for as much creative freedom as possible, but is there room for it within the investment budget? Our Datapool Element Clusters show that in approximately 40% of projects, an average of 2.5% Non functional Level Area (NLA) is added to GFA,A to create voids and similar architectural features. This level of design freedom forms the third requirement.
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4. Furthermore, due in part to COVID, there is growing interest in outdoor spaces, such as internal terraces, cantilevered balconies, and rooftop terraces. Depending on their size and design, costs vary widely, ranging from €3,500/m² GFA,C for a couple of 1m² small cantilevered terraces with high finish railing on 3 sides to €70/m² GFA,C for simple concrete tiles on pedestals for rooftop terraces. The graph below illustrates the inconsistency in these costs: to be statistically reliable, the coefficient of determination (R²) should be greater than 0.50, yet our data barely reaches 0.20.

This highlights the need for specific definitions, which leads to the fourth requirement.
For example, big cantilevered standard terraces in a new construction project in a suburban area cost approximately € 800 per m² GFA,C under a traditional procurement model¹.

Impact of Building Shape on Costs

It goes without saying that the shape of a building can significantly drive up costs. From the data, we can identify several key factors that allow for cost optimization:

• Roof-to-GFA,A Ratio vs. Number of Floors
  There is a clear statistical correlation between the ratio of roof area to Gross Floor Area type A (GFA,A) and the number of storeys.

• Facade-to-GFA,A Ratio vs. Number of Floors
  For detached buildings, there is no clear statistical relationship between the facade-to-GFA,A ratio and the number of storeys.
  However, when shared walls with adjacent plots are involved, a slight statistical correlation can be observed.²

Unraveling the Cost Structure: Are We Looking at the Right Level?

To analyze construction costs, we use NEN 2699:2017 – Investment and Operating Costs of Real Estate: Definitions and Classification as our guiding framework. This standard categorizes costs at the highest level of abstraction and further refines them into clusters and element clusters.

Our Datapool provides cost benchmarks at the element cluster level (Level 3), as this is the only level where we can accurately differentiate between various massing models. But after three years of data collection, can we extract meaningful insights at the higher classification levels?

Examining Initial Construction Costs (Level 1)

When aggregating all data, the categorie “B Initial Construction Costs” is best to be correlated with the Level Area (LA). However, we only see a squattered plot without any statistic meaning³.

When we attempt to differentiate by project type – new construction, renovation, and heritage restoration – no clear correlation emerges either.

Are Level 2 Clusters More Insightful?

To investigate this, we analyze B1 (Structural & Architectural Works) and
B2 (Installations). Yet, also at this level, no definitive trend can be established.

One important observation, however, is the sharp rise in the cost share of installations over the past decades. The once-standard 20% share of installations relative to structural & architectural works is now an exception, limited mainly to renovation projects where existing systems are upgraded without integrating sustainable technologies.

¹ In a traditional procurement model, a significant portion of the General Construction Costs, Overhead Costs, and Profit/Risk margins are included in the price.

² Underground floors can extend beyond the footprint of the above-ground volume and therefore require waterproofing. This is why, in the first graph, the ratio is based on the total number of storeys.
However, underground floors have minimal exposed facades. For this reason, in the second graph, the ratio is only related to the number of above-ground floors.

³ LA = NLA + GFA,A + GFA,B + GFA,C