Is a refurbished office space more cost-effective than new construction?

When choosing workspace in 2025, the decision between new construction and refurbished office space always lies on the cost factor. While new builds promise modern amenities and long-term sustainability, refurbished spaces typically offer lower upfront costs and quicker move-in timelines. Therefore, this guide looks at new construction vs. refurbished building costs and how to find ideal office space in 2025.

Refurbished spaces are increasingly becoming popular due to their balance between affordability and functionality. These offices often retain the structural elements of older properties while introducing new interior systems to meet modern standards. Below are the considerations of refurnished office spaces over new construction offices.

Upfront costs

Refurbished spaces in London often deliver significantly lower headline rents than Grade A offices (1). For instance, a well-executed refurbished office can save tenants £1.50 per sq ft compared to new builds while retaining many Grade A aesthetics. Many refurbished properties also arrive already fitted or partly fitted, meaning basic infrastructure like lighting, ceilings, and sometimes partitioning or finishes are in place. This reduces tenant fit-out expenses substantially.

Project duration

One of the most substantial advantages of refurbished offices is delivery speed. According to analysis, refurbishments can be 50-75% quicker than new builds of similar scale, depending on how extensive the work is. Many refurbishments use existing structures, cores, and services with moderate upgrading. This shortens the time between agreement and full occupation, reducing tenant downtime.

Sustainability benefits

Many refurbished offices include beneficial upgrades such as LED lighting, better HVAC systems, and improved insulation (2). However, they rarely achieve the same energy efficiency ratings as new constructions. Most refurbished properties achieve EPC ratings of B or C, which means slightly higher long-term energy bills than A-rated new builds. However, these improvements contribute to sustainability goals by reusing structural materials, thus reducing carbon emissions tied to demolition and rebuilding.

Flexibility

Flexibility in office layouts is often constrained in refurbished properties. Factors such as ceiling height, existing floorplates, and core placement can limit design possibilities. Unlike new builds that can be tailored to bespoke specifications, refurbished offices are best suited for tenants who can adapt their workplace strategy to a preconfigured shell. This makes refurbishments less ideal for companies with complex office fit-outs (3).

Building new offices or leasing new purpose-built Grade A/A+ stock involves different cost dynamics. These are often weighted toward higher upfront expenses and long-term operational savings. Below are the critical areas to examine before choosing new builds.

Upfront costs

Prime rents in London’s best new-build spaces are significantly above the average for refurbished or grade B stock. According to a market report that is based in London, prime new builds command 23-40% higher rents per sq ft than refurbished alternatives.

Although some developers now offer Category A+ or turnkey fitted spaces, most new constructions still require significant office fit-out costs. These include partitioning, furniture, and technology infrastructure, adding up to 25% to overall occupancy expenses.

Project duration

New office construction involves longer timelines, particularly if tenants lease during development or acquire a shell-and-core property. Fit-out works and approvals can delay move-in by several months. However, occupancy is straightforward and seamless once the project is completed, with systems designed to modern specifications.

This extended duration may not be problematic for companies with long-term strategies. However, comparing refurbished building costs with the delayed efficiency of new construction is still critical.

Sustainability benefits

New buildings hold a decisive advantage in sustainability (4). Most modern constructions are designed to achieve EPC A ratings, incorporating cutting-edge HVAC systems, triple glazing, advanced insulation, and smart energy management. These efficiencies can reduce energy bills by up to 25% compared with B—or C-rated refurbished buildings (5).

New offices reduce operational costs for organisations committed to ESG goals while enhancing corporate reputation. This long-term advantage offsets the premium rental prices of prime new constructions.

When it comes to cost-effectiveness in 2025, the right choice depends on your business goals.

Refurbished offices are typically the more affordable option upfront. They offer:

• Lower rent
• Reduced fit-out costs
• Faster move-in times

This makes them ideal for companies that need flexible, budget-conscious solutions without long delays.

New office buildings, on the other hand, are a smart investment for businesses focused on the future. Although they come with higher initial costs, they deliver long-term value through:

• Energy efficiency
• Custom-designed layouts
• Enhanced brand image

With London’s tightening energy regulations and the hidden costs of retrofitting older spaces, choosing a new build can help avoid surprises – and support your sustainability goals.

Reference list:

(1) Top 8 refurbished office spaces in Central London

(2) Benefits of leasing the refurbished buildings in Central London

(3) Office Fit-outs explained: Cat A vs Cat B

(4) 8 smart ways to build sustainable office design

(5) EPC ratings – Avoid fines when leasing older office spaces in Fitzrovia