What you need to know about the phrase ‘cost per metre rate’ in construction

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What you need to know about the phrase ‘cost per metre rate’

The most common complaints for construction clients is always that the building contractor asks for more money than originally quoted at some point during the project, leaving the clients to find additional finance to complete the project.

According to the former president of the Association of South African Quantity Surveyors (ASAQS) Bert van den however, there are a number of design variables which can adversely influence square metre rates, thereby giving a false impression of the cost of a building project and this can lead to serious problems for both clients and contractors.

As such, clients should be privy to the fact that a generic cost per square metre rate doesn’t give the detailed information that needed regarding finishes, fittings, services, site development costs.

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There is a wide range of other building elements that also have an impact on costs and therefore quantity surveyors normally do elemental estimates to derive the square metre cost of a project.

Normally, quantity surveyors advise clients on costs of elements such as the substructure, ground floor, external façade, roofs etc. However, the clients should not that less than 40% of a building’s cost is the structure itself, so the project is far from completed once the foundation has been laid, the walls have been built and the roof constructed.

Bearing that in mind, contractors who tender on a cost per square metre basis put both themselves and their clients at risk. This usually results in lawsuits by the clients owing to over-payments on structural elements yet the project is on a standstill.

A square metre rate is usually calculated by dividing the net cost of the building (excluding site works, cost of land, etc.) by the gross square meters of the building or gross floor area (GFA). Typically GFA can be defined as the total floor area inside the building envelope, including the external walls, and excluding the roof.

It therefore goes without saying that the simpler the shape of a building, the lower the unit cost will be.

Hiring a quantity surveyor early in the project, preferably not later than when sketch plans are being prepared by the architect, will put a client in the best possible position to achieve the look, finishes and final touches they want and still remain within their budget, he says.

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