3 Ways Modularity is Driving the New Economics of Office Fit-Out
Independent cost consultancy research highlights cost benefits of modular design.
As construction costs rise and lease terms shorten, traditional office fit-outs are becoming increasingly expensive and inflexible. New data highlights how adaptable solutions, like modular rooms, deliver significant cost benefits that help reduce financial risk.
Our latest report with independent cost consultancy firm, EthosEQ, analysed the lifecycle costs of office spaces built with modular systems and traditional methods.
As the first comprehensive study to compare the long-term cost efficiency of two popular office fit-out solutions, the report shows how much organisations can save by adopting modular rooms, largely thanks to their ability to evolve and be reconfigured over time. Let’s dive into this topic.
Financially efficient from day one
A workplace fit-out typically requires a large team of tradespeople on-site for weeks, with each task following a scheduled sequence (in 2024, the average fit-out took between 8 and 14 weeks). Construction accounts for 67% of the overall fit-out cost breakdown; however, JLL projects office fit-out costs to rise 3–5% annually.
As traditional fit-outs carry high upfront costs, modular workplaces seem an attractive alternative. The cost advantage of modularity is particularly pronounced in premium cities with expensive labour costs, the highest being New York, London, Paris, San Francisco, and Zurich – all of which were included in our analysis across 16 European cities, three in the Middle East, and eight in the American market.
Our report found that modular rooms deliver the highest savings where traditional construction is most expensive. For example, Mute Modular rooms deliver savings of up to 63% in Zurich and 56% in Geneva from day one.
Requiring a small team to install, modular rooms can be assembled in just 5-6 days, making it eight times faster than traditional methods (approximately 44 days). The works can even be scheduled over a long weekend, reducing downtime in the workplace.
This speed translates directly into value, giving landlords a competitive edge. Faster installations reduce occupancy voids and shorten rent-free periods, enabling buildings to start generating income almost immediately.
Across the European and Middle Eastern cities analysed, Mute Modular rooms were on average 9% cheaper than traditional meeting rooms on day one. As layouts are reconfigured over time, this advantage reached 43% after three years, and 102% after seven years.
Adaptability that pays off
Traditional fit-outs can respond to evolving workplace needs, albeit slowly. Even minor layout adjustments, like converting a meeting room into a lounge or expanding a space for a growing team, require additional costs and time, making modular workplaces a faster, more flexible alternative.
In traditional fit-outs, walls must be demolished and rebuilt, requiring secondary works to adjust mechanical, electrical, and plumbing (MEP) systems, such as ventilation and heating, power distribution and cabling, lighting, and internet infrastructure. With modular rooms, however, minor layout changes are more straightforward, avoiding MEP adjustments and lowering costs.
Modular rooms can also be reconfigured repeatedly without high additional costs. Minor adjustments deliver an average saving of 41% across all markets, maintaining modularity’s cost efficiency.
Major reconfigurations amplify the benefits further. In scenarios requiring a 75% reconfiguration, modular rooms exceed savings of 90%, compared with traditional construction.
In London, the report showed that modularity can help organisations potentially save up to 150% after just 7 years. As the cost of traditional assets compounds with each reconfiguration, modular solutions preserve asset value, making them indispensable for fast-paced, adaptable workplaces.
Built to last, not for landfill
Viewed across a workplace lifecycle of ten years, modularity makes a strong financial case: proving to be three times more economical than traditional construction when full reinstatement is considered.
Assuming one configuration during the lease, we’ve calculated that the entire market savings would exceed €1 billion for EMEA and €1.5 billion for the American market (based on market data published by JLL).
Even in less premium markets such as Lisbon and Warsaw, where the upfront cost of modular solutions may be up to 30% more than traditional works, savings after seven years are substantial: 28% in Lisbon, and 76% in Warsaw. Our report found that Mute Modular rooms deliver lifecycle savings of up to 352% across all markets analysed.
Through a workplace’s lifecycle, traditional fit-outs leave little or no residual value, while modular rooms can be dismantled and reused, preserving their asset value. Think of it like moving house – you wouldn’t throw away all your furniture, so why treat office fit-outs any differently?
The liability of traditional construction is seen in scenarios where landlords require reinstatement works to return a workplace to its original condition. Beyond cost, the implications extend to carbon, with processes involving stripping out and disposing of high-embodied building materials, such as plasterboard, glazing, ceilings, and multiple finishing layers. A traditional workplace might embody 1.5-2.0 tonnes CO2e, with emissions potentially tripling over ten years.
Unlike traditional construction, where, in 2024, only 6.9% of all materials used globally were recycled, Mute Modular has been designed with circularity in mind.
Although Mute Modular rooms embody 1.0-1.5 tonnes CO2e upfront, their use across multiple sites decreases per use to below 0.5 tonnes CO2e. With a significantly lower lifecycle carbon footprint, modularity not only cuts costs but also makes workplaces more sustainable.
The new economics of fit-out
Across global markets, modularity fundamentally reshapes the economics of workplace fit-out decisions, while challenging the status quo of construction.
Our research shows that choosing truly adaptable, modular solutions over traditional approaches isn’t just a design decision but a strategic one. The question is no longer whether modularity works, but whether traditional construction will continue to justify itself when more cost-efficient alternatives are available.
Download our report here to find out more about the cost savings of modularity.
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