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What would the construction cost be per meter (including furniture) for WeWork's branch construction in Israel?
Hello there! Thank you for your question regarding the construction cost per meter (including furniture) for WeWork's branch construction in Israel . The most helpful sources that I found on this topic were published on MAN and CBRE. The short answer is that the construction cost per meter in Tel Aviv is $14,217.57 (for construction from scratch) and $2121.76 (for lease agreement). The construction costs for the same in Jerusalem for the same are $$12,793.64 and $2114.71. Below you will find a deep dive of my research findings along with how I came to this conclusion. I hope that this helps you!
METHODOLOGY
In order to begin my research, I started by searching numerous articles, reports and whitepaper journals to establish the different factors to be considered in the construction of a coworking site and childcare center in Israel. Now, since the rates of construction vary vastly due to numerous reasons (real estate price, labour costs, etc.) throughout the country. I have taken the case of 2 cities, Tel Aviv and Jerusalem to proceed with my calculations. I have provided an estimate for construction from scratch as well as lease format for both the cities.
CALCULATIONS
For providing an estimate of the cost incurred, I have taken into account the following factors on which the cost per meter for a co-working site+ childcare center in Israel will be based upon.
1) Area required- As per an article published by Gigaom, the workspace required for a coworking site with 53 members was 1800 sq. ft. (which is equal to 167.22 sq. meters). I have taken this area as the base for all my calculations.
2) Construction Cost/Rent- The selling cost of office buildings for both my examples, Tel Aviv and Jerusalem, were taken from a survey conducted by MAN. Now, an article published on Haaretz states that construction amounts for 35% of the total property price in Israel. Hence, the actual construction can be easily calculated by back of the envelope calculations. The rental cost for both the cities was also provided by the same survey.
3) Fitting Costs- Fitting costs includes cost of basic office amenities like security, Audio Visual installations, IT, and other fees, and was provided by CBRE. The price for the same ranged between 999-2127 euros ($1055.79 - 2247.92) per square meter, and I have taken an average price of $1651.85 as the basis for my calculations
4) Furnishing Costs- Furnishing costs comprising of standard cubicles varied between 95-210 euros ($100.46 - 221.94) per square meter, as per data provided by CBRE, depending on the material quality. I have hence taken an average price of $161.17 for my calculations.
5) Baby Related Equipment- According to data provided by Smallbusinesschron, the cost of baby related equipment varied between $300-400 per child. Hence, I have taken an average of $350 per child in my calculations.
COST FOR CONSTRUCTION
1) Tel Aviv
a) Office Construction cost
Average selling price per square meter = $4,231.34
Average construction cost per square meter = 4,231.34*35/100
Average construction cost per square meter = $1,480.97
Total construction cost = $1,480.97*162.77
Total construction cost = $241,057.486
b) Fitting cost
Average cost per square meter = $1,651.85
Total construction cost = 1,651.85*167.22
Total construction cost = $276,223.19
c) Furnishing Costs
Average cost per square meter = $1,651.85
Total construction cost = 1,61.17*167.22
Total construction cost = $26,950.84
d) Baby Related Equipment
Cost per baby = $350
Total cost = 350*50
Total cost = $17,500
Now,
Cost of coworking site = 241057.48+276223.19+26950.84+17500
Cost of coworking site = $561,731.52
Cost of childcare center = $1,815,730.02
Total project cost = $2,377,461.54
Therefore,
Total cost per meter = 2,377,461.54/167.22
Total cost per meter = $14,217.57
2) Jerusalem
a) Office Construction cost
Average selling price per square meter = $3,022.43
Average construction cost per square meter = 3,022.43*35/100
Average construction cost per square meter = $1,057.85
Total construction cost = $1,057.85*162.77
Total construction cost = $172,186.33
b) Fitting cost
Average cost per square meter = $1,651.85
Total construction cost = 1,651.85*167.22
Total construction cost = $276,223.19
c) Furnishing Costs
Average cost per square meter = $1,651.85
Total construction cost = 1,61.17*167.22
Total construction cost = $26,950.84
d) Baby Related Equipment
Cost per baby = $350
Total cost = 350*50
Total cost = $17,500
Now,
Cost of coworking site = 172186.33+276223.19+26950.84+17500
Cost of coworking site = $492,860.35
Cost of childcare center = $$1,815,730.02
Total project cost = $2,308,590.37
Therefore,
Total cost per meter = 2,308,590.37/167.22
Total cost per meter = $13,805.71
COST FOR RENT
1) Tel Aviv
a) Office Rent Price
Average asking rent per square meter = $24.68
Total rent cost = 24.68*167.22
Total rent cost = $4,126.99
b) Fitting cost
Average cost per square meter = $1,651.85
Total construction cost = 1,651.85*167.22
Total construction cost = $276,223.19
c) Furnishing Costs
Average cost per square meter = $1,651.85
Total construction cost = 1,61.17*167.22
Total construction cost = $26,950.84
d) Baby Related Equipment
Cost per baby = $350
Total cost = 350*50
Total cost = $17,500
Now,
Cost of coworking site = 4126.99+276223.19+26950.84+17500
Cost of coworking site = $324,801.02
Cost of childcare center = $$1,815,730.02
Total project cost = $2,140,531.04
Therefore,
Total cost per meter = 354,801/167.22
Total cost per meter = $12,800.688
2) Jerusalem
a) Office Rent Price
Average asking rent per square meter = $17.63
Total rent cost = 17.63*167.22
Total rent cost = $2,948.09
b) Fitting cost
Average cost per square meter = $1,651.85
Total construction cost = 1,651.85*167.22
Total construction cost = $276,223.19
c) Furnishing Costs
Average cost per square meter = $1,651.85
Total construction cost = 1,61.17*167.22
Total construction cost = $26,950.84
d) Baby Related Equipment
Cost per baby = $350
Total cost = 350*50
Total cost = $17,500
Now,
Cost of coworking site = 2948.09+276223.19+26950.84+17500
Cost of coworking site = $323,622.12
Cost of childcare center = $1,815,730.02
Total project cost = $2,139,352.14
Therefore,
Total cost per meter = 354,801/167.22
Total cost per meter = $12,793.64
CONCLUSION
Based on my research, I have concluded that the construction cost per meter in Tel Aviv is $$12,800.688 (for construction from scratch) and $2,121.76 (for lease agreement. The construction costs for the same in Jerusalem for the same are $12,793.64and $2,114.71.
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