QSB 3214

BUILDING ECONOMICS

Introduction
The costs of buildings are influenced by a variety of factors, some
of which are interrelated, such as:
building shape and size,
storey heights and total height,
size, shape and constructional system;
the amount and type of materials used (the building's
specification) and how much they cost;
the costs of human resources involved in design and
construction; the cost of plant, machinery and tools;
the
efficiency
and
integration
of the
design,
procurement and construction;
the effectiveness of the design in allowing efficient, low-cost
use of the building when completed.

LECTURE 4

BUILDING MORPHOLOGY AND

DESIGN ECONOMICS
HO JUNE KHAI
MSc Const Mgmt, LLB (Hons),
PgDip Const Law & Arbitration (with Merit), Dip Tech (Bldg)
FCIArb, FMIArb, MSIArb, MRICS, MCIOB, MBEng, MMIM
Chartered Surveyor, Chartered Builder, Building Engineer
Certified Construction Project Manager,
Member Society of Construction Law
Panel Arbitrator & Mediator

Other factors affecting cost include:

the form of contract,
period for completion,
structural form,
extent of prefabrication and standardisation; and
consideration of maintenance and running costs.
Different procurement methods may also result in different costs,
and the design function and its effectiveness are crucial.

It is the building's design that establishes the parameters; it is the

design which determines whether value can be achieved at
acceptable costs; the construction process can only achieve value
to the degree the design allows.

Factors influencing the Construction Cost

The following factors have a direct influence on the cost of a
project, and need to be considered during the economic evaluation
of the building or engineering structure.

There are many examples of failure and many examples of

success; the differences lie not only in the nature of the design but
in the relationship between the design, construction management
and the control of costs.

Site considerations
Each construction site has its own characteristics which have an
important influence on its suitability for development.
The size of the site required will generally be determined by
the type of project to be constructed.
The cost of the project will be affected by its location. A
congested city site have problems of access, materials
deliveries, close proximity of adjacent structures etc. It may be
located in the outskirts with its own problems of material and
labour availability and particularly transport costs.

JK Ho

The availability of mains services or the cost of their provision

will be an important consideration.
Often, because of the high costs of building land, it is essential
to optimize the use of the site for building purposes. However,
the siting and orientation of buildings can have recurrent
implications for the user's future energy consumption.
The ground condition of the chosen site such as poor groundbearing capacity, is a factor that can substantially influence
constructional costs.
Poor working conditions for men and machines which are
aggravated in inclement weather conditions. Steeply sloping
sites can often result in large quantities of cut and fill.

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Building Size
This is an important factor in terms of cost efficiency, because
costs are not in proportion to changes in size.
Larger buildings have lower unit costs than smaller sized
buildings with an equivalent quality of specifications.
For example, a dwelling house on its own individual plot of
land will cost more to construct than a similar house from a
large housing estate contract.
Smaller factories cost more per unit than their larger
counterparts. To some extent this is due to the economic
theory of economies of scale.

Planning efficiency

Although the outline alternative plans for a project may be

similar in overall size, the way that space can be utilised
within the project may vary considerably.

The building may have been designed to make the best

possible use of space, but the ratio between usable and nonusable (circulation) space will differ.
One of the main aims of an economic layout will be to reduce
the amount of circulation space to an acceptable minimum.
The ratio of non-usable space will depend on the type and
purpose of the building.

Plan Shape
The plan shape of any structure has an important effect on the
overall cost of the project. This effect is not restricted to the
external envelope costs, but also applies to the internal
division elements.
A square-plan-shaped structure will in the majority of cases
provide the most economic solution. This is largely due to the
wall-to-floor ratio. A square shape provides the lowest amount
of wall area to gross floor area.
The more complex the shape, the higher will be the overall
cost of the structure based on an agreed required floor area.

JK Ho

Height
The constructional costs of tall structures are greater than those of
low-rise buildings offering a similar amount of accommodation.
Tall structures are thus preferred only where the land is either
expensive or in scarce supply.
provision of vertical transportation such as hoists and cranes,
the problems with material storage, the delays in waiting for
the construction to 'set', the increased amounts payable to
operatives and safety requirements.
increasing costs of engineering services and their provision
within the building, such as lifts, refuse disposal installations,
pumping equipment for sewage disposal and protective
installations such as firefighting equipment and lightning
conductors.

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provision for certain elements such as foundations, the

necessity for a structural frame, more stringent constructional
requirements for staircases, the provision of more fittings and
furnishings for compactness and convenience, and the
increased costs of engineering services described above.
improvement of fire-resistance precautions, particularly
insulation between floors.
increase in the proportion of circulation areas required,
including wider stairways, larger landing areas and areas for
access.
wind loading factors need to be taken into account with tall
buildings, and this is likely to increase the constructional
difficulty and its associated costs.

lesser competitiveness for the work because of the limited

number of building contractors capable of undertaking the
work.
due to the complexities involved, more of the work has to be
awarded to specialist subcontractors.
whole-life costs of buildings are also likely to be higher with
taller buildings due largely to maintenance costs - such as lifts,
plumbing and heating and electrical distribution, window
cleaning or specially designed windows.

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The provision of required space below ground level is also an

expensive alternative to the more traditional low-rise construction.
However, there are circumstances where the incorporation of the
basement within a structure is preferred for security reasons where
strong rooms of banks are generally below ground level.

Often the shortage of land is one of the major reasons for

constructing below ground level. Car parking to multi-storey
office buildings is often provided in this way.

In other circumstances, increased storey heights may be

preferred for prestige reasons, as in the case of hotel foyers.
Buildings such as churches, sports halls and theatres provide
for high storey heights because of either tradition or design
necessity.

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Excessive storey heights have the effect of increasing the costs

of the vertical circulation elements initially, and also the future
maintenance costs, particularly for engineering services, such
as heating and ventilation.
Buildings with high storey heights will cost more per square
metre of floor area than comparable accommodation with lower
storey heights. Such buildings also result in higher wall-to-floor
ratios.

Groupings of buildings
Savings in cost can usually be achieved by inter-linking
buildings or structures because of a saving in foundation and
external walling costs or other common items of construction.

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Designs which require unnecessarily complex construction

methods and procedures or fail to take account of the
mechanics of the work on site, fail in this respect.
The ease with which buildings and other structures are erected
on site should result in financial savings to the contractor.
Contractors, during tendering, are particularly concerned with
the alternative methods of construction, and this is a factor
which affects the tender sum and ultimately the construction
costs.

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JK Ho

Storey Height
The storey heights of buildings are largely determined by the
needs of the user of building.
A greater storey height than normal may be necessary to
accommodate larger machinery or equipment, or it may be
necessary to provide space within false ceilings for service
ducts for cables, pipes or air conditioning ducts.

Buildability
Buildability is defined as the extent to which the design of a
building facilitates ease of construction, subject to the overall
requirements for the completed building.
Buildability is largely concerned with the work on site and the
practicalities of producing a structure from a design.
Good buildability means that the design takes a very close
account of the way in which the building will be constructed,
and the conditions imposed on this process.

Constructional Details
The cost differences between alternatives may make a substantial
difference to the overall cost of the project. Other factors, such as
the length of time required for construction purposes, will also
need to be considered.
concrete may have an initial cost advantage, but the speed of
steel frame erection may show a reduced contract period with a
consequent saving in costs over the entire project.
use of prefabricated components or off-site techniques will
generally tend to shorten the contract period, but at a higher
costs.

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Standardisation, Prefabrication and Pre-assembly

Standardisation, prefabrication and pre-assembly are not new
concepts in the construction industry and have been used as a
means of increasing overall efficiency, reducing costs and
improving quality.
Main benefits gained from greater standardisation of building
components and design details:
Improved product predictability
Improved quality
Increased efficiency
Improvements to systems, processes and practices
Reductions in costs
Ease of long-term maintenance
Potential improvements to social and environmental
considerations

Refurbishment
A further factor to consider at the inception stage of a new
project is the availability of an existing project that may be
capable of adaptation.
Generally, the refurbishment of an existing project will always
be less expensive than the construction of a new building.
Extensive refurbishment may be so necessary as to make
redevelopment a better alternative.
Sometimes, where the space available is insufficient, the
possibility of extending the premises may also be considered.
A further factor is that of continuity of use, which s not possible
if demolition and rebuilding are required and some form of
temporary accommodation will be required.

Refurbishment does have the advantage that it can often be

carried out on a phased basis, thus allowing some continued use
of the existing premises

Design Economics

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To enable alternative designs and forms of construction to be

examined on a comparable basis, the most convenient unit used
for expressing building costs is the square metre of floor area.
The standard used for measuring cost in the elemental system of
cost control is the cost per square metre; RM/m2. This is
consistent with property development which is described in terms
of usable or rentable floor area;
measured between the main enclosing walls (inner faces), and
making no deductions for internal walls, staircases, lift shafts
or other circulation space.

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allowance to be made for widely differing conditions on

different projects such as:
differing soil conditions can result in quite different
foundation costs for similar buildings,
cost of finishing will be influenced by the requirements of
the specification or owner/user.
lift costs affected by the height of the building, area of
each floor, and the type of lift required.

Clients Requirement
PERFORMANCE
Appearance
Quality
Function
Durability
Maintenance

CLIENTS
REQUIREMENTS

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JK Ho

TIME
Design length
Start date
Hand-over
Completion

COST
Budget
Estimate
Tender
Final account
Costs-in-use

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Design Factors
Design factors that influence the cost of the building are generally:
Shape
Size
Circulation space/Planning Efficiency
Storey height
Total height of building

Shape
The shape of a building influences the cost.
generally, the simpler the building shape the lower will be the
cost.
the perimeter/floor area ratio will increase, and a corresponding
higher unit cost with:
long and narrow building
complicated and irregular outline

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10 m

10 m

2m

50 m

Area = 100 m2
Perimeter = 104m
Ratio = 1.04
Area = 100 m2
Perimeter = 40m
Ratio = 0.4

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4m

5m

5m

2m

4m

6m

30 m

Dia = 11.3 m
30 m

Area = 100 m2
Perimeter = 86m
Ratio = 0.86

Area = approx. 100 m2

Perimeter = approx. 35.5m
Ratio = 0.36

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Buildings with irregular outline result in increased costs due to

works being more complicated, extensive and expensive for:
setting out,
external wall and finishes, cladding
roofing
perimeter drainage work
sewerage reticulation

The geometry of the floor plan has significant impact upon the
interior space planning, exterior building envelope and
structural system.
Generally the simpler and more regular the floor shape, the
more easily it can be adapted to the users needs in terms of
space planning.
Square and rectangular floor plans work more efficiently than
curved and irregular shapes

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509m

33

452m

421m

415m

391m

384m

374m

367m

346m

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Other consideration for running costs of the completed building:

higher heat loss / heat gain consideration of cavity walls, clay
bricks, double glaze or insulating glass or solar film windows.
window cleaning and painting.
energy efficiency
Examples of energy efficient technology:
The use of insulation so that less heating or cooling energy is
used to achieve the same temperature required.
Natural lighting such as skylights or the use of fluorescent
lights instead of incandescent lights to attain the same level of
illumination.
The use of natural ventilation instead of mechanical means of
cooling such as fans or air conditioning units.

Wall / Floor Ratio

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 The orientation and location of the building can also affect

energy use.
a roof that slopes towards the south is exposed to more
sunlight than one facing the north, which is useful when
solar energy is to be harnessed.
Orientation can also affect the benefits that can be gained
from winds and natural lighting.
Proper placement of windows and skylights and the use of
architectural features can reduce the need for artificial
lighting or mechanical ventilation.

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Hence, there is a need to maintain a balance between the various

design criteria i.e.:
Cost
Function
Appearance

Cost saving alternatives by QS are pointless if they will not

function satisfactorily or are aesthetically undesirable.

A square building is the simplest plan shape:

most economical to construct but not always a practicable
proposition.
adequate natural daylighting to most parts of the buildings is
highly desirable in most residential, offices, schools and
hospitals facilities.
a large, square structure would contain areas in the centre of the
building which would be deficient in natural lighting.
there are also difficulties in the planning and internal layout of
the accommodation.
A rectangular shaped building, although more expensive
compared to a square shaped building, with the same floor area,
may be desirable because of:
practical and functional reasons
aesthetic values

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Some buildings have their own peculiar problems or restriction,

which dictate the form and shape of the building . Examples:
hotels requiring rooms to have good views for commercial
reasons.
prominent buildings to be tall for advertising effect.
type of activity/use that require large open space within the
building such as warehouses. (convention/assembly halls)

Circular buildings enclose the greatest floor area for the smallest
perimeter but are:
uneconomical to construct
major internal planning and layout problems.

Slender towers are aesthetically desirable but have poor ratio of

usable area to gross floor area and are prohibitively expensive.

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Decreasing areas of staggered floors, although are aesthetically

desirable, do not make full use of the footprint of the building.

Size
Increase in the size of the building will usually results in reduction
in the unit cost such as cost per square metre of the floor area.
Certain costs do not rise proportionately with increases in the
plan size of the building such as:
transportation,
temporary site buildings for material storage, offices and
workers accommodation,
temporary water and electricity supply,
temporary roads and drainage,
site personnel etc.

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These costs do not vary substantially with an increase in the size

of the building and will constitute a reduced proportion of the total
costs on a larger project.

15.0

Example: fixed costs for a RM10mil project may cost RM1mil or

10% of the total cost but the fixed costs for a RM10bil project will
not come to RM1bil!
A larger building is usually less costly to build because; as the
wall/floor ratio reduces,
rooms tend to be larger with a proportional reduction in the
quantity of internal partitions, wall finishing, etc.
there may be a proportional reduction in extra costs of
windows and doors over walls.
in high rise buildings, cost advantage is gained from the lifts
serving larger floor area.

8.0

8.0

B
30.0

Area A
Perimeter A
P/Flr

= 120m2
= 46m
= 383mm

Area B
Perimeter B
P/Flr

= 240m2
= 76m
= 317mm

Length of building doubled = 2x floor area

Length of external wall reduced from 383mm to 317mm = 17%

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Circulation Space / Planning Efficiency

The reduction of circulation space is the main factor to an
economic layout for a building. Circulation space such as entrance
halls, lobbies, passage ways, corridors, stairwells and lift wells are
considered as dead space which:
cannot be used for profitable purposes;
incur considerable costs in heating and air conditioning,
lighting, cleaning, decorating, maintenance and etc.
Although it is desirable to reduce circulation space to a minimum,
it must be compatible with the satisfactory functioning of the
building. Example:
Elimination of lengths of corridor may cause travel through
rooms;

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Open plan may not be practical or most economical as it will

involve larger spans and heavier building structure and
extensive foundations;
reducing the width of corridors which inconveniences the
users or not complying to requirements of fire safety is not
justifiable;
prestige buildings require spacious entrance halls, lobbies and
corridors to add to the impressiveness, dignity and aesthetic of
the building.

Cost is not the only criterion to be considered; aesthetic and

functional qualities are also important.

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5.0

24.0
5.0

12.0

5.0

5.0

One of the main aims of an economic layout is to reduce the

amount of circulation space to an acceptable minimum. The ratio
of net usable space over the gross floor area (internal) reflects the
planning efficiency of the building layout.

5.0
24.0

48.0

GFA
less circulation
Usable Area

= 576m2
= 96m2
= 480m2

\ Efficiency Factor = 83%

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JK Ho

GFA
less circulation
Usable Area

= 576m2
= 116m2
= 480m2

\ Efficiency Factor = 80%

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Storey Heights
Increases or decreases in storey heights cause variation in the cost
of the building without changing the floor area. The main
constructional items affected by a variation in storey height are
walls and partitions, and the associated finishing and decorations
including:
Increased volume to be heated/cooled necessitating larger
capacity of HVAC units and loner lengths of pipes, cables and
ducting;
Longer service, waste and soil pipes to supply sanitary/service
appliances;
Increased cost of constructing staircases and lifts;
Possible increased cost of roof construction due to hoisting;
Possible additional cost in installing finishing and decorations
to ceilings;

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Total Height of Buildings

Constructional costs of buildings rise with increases in the height.
Circulation space requirements also rise with increases in height o
buildings.
For reasons of economy, building heights are increased/maximised
in very highly priced land, or in very high cost site locations.
Commercial/office developments in tower form are more
expensive in cost than low rise but the rent/returns obtainable may
more than offset the additional cost.
Other factors affecting cost of high rise buildings compared to low
rise are:
Soil conditions and the building loads which will affect the
type of foundation required and the costs involved.

Services and associated equipment becomes more

sophisticated and costly with high rise buildings;
Fire protection requirements becomes more sophisticated,
involving wet or dry risers and sprinklers and fire detection
devices;
Specialist design fees will be incurred for the foundation and
frame, mechanical and electrical services and fire fighting
equipment and possibly building automation systems;
As building height increases, the structural components and
circular areas tend to occupy more space.
Net floor area becomes lesser in proportion to the gross
floor area.
Results in higher cost per square metre of usable floor area.

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To show the effect of shape and quantity on cost, several

indicators or ratios are used. It is important to realise that shape
relates to quantity in many elements, which in turn determines the
ultimate cost.

Wall/Floor Ratio
Calculating the wall area against the floor area takes storey
height into account as a cost factor.
Confirms that the wall perimeter length is an important cost
factor .

Ratios for Comparing Cost

Some of the ratios used are:

Wall/Floor
Window/Wall
Partition/Floor

Window/Wall Ratio
The cost per square metre of windows is generally much more
expensive than a square metre of wall.

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JK Ho

Possible increased cost of foundations to support the increased

loads if the increase in storey height and the number of storeys
are considerable.
More expensive plant and equipment such as tower cranes,
concrete pumps and passenger and material hoists required for
construction.
Means of vertical transportation and circulation in the form of
lists and staircases. Cost for the provision of lifts will sharply
increase at the storey heights where the first and subsequent
lifts become necessary.
Maintenance cost becomes more costly at higher levels,
example window cleaning.

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10.0
5.0
6.0

10.0

5.0

5.0

Measures the difference in ratio of circulation space to office

floor space or leasable space.
Fully compartmentalised office space a lot of circulation
space therefore less leasable space.
But cell like offices can be let out individually or in small
groups when there is no demand for the large open plan
offices.

Buildings height : 3 metre high

10.0

Partition/Floor Ratio
Useful when comparing buildings such as office blocks, eg.:
large open plan office space, and
cell like offices with plenty of corridors typical in academic
buildings.

6.0

20.0

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5.0

= 40m x 3m
= 10m x 10m
= 120m2 / 100m2 = 1.2

Plan B:

wall area
floor area

= 50m x 3m
= 20m x 5m
= 150m2 / 100m2 = 1.5

wall area
floor area

= 52m x 3m
= 16m x 4m + 6m x 6m
= 156m2 / 100m2 = 1.56

Plan C:

10.0

A
5.0

Shape A has a lower wall to floor ratio than Shape B.

This would mean that Shape A would be the preferred layout.
However, shape A has problems associated with dividing the
space within the walls.

20.0

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The Partition/Floor Area Ratios (measured on the inside face) are:

Shape B requires less dividing walls to partition the area into

four equal parts.

Plan A:

Plan B:

partition area
floor area

= 20m x 3m = 60m2
= 10m x 10m
= 60m2 / 100m2 = 0.6

partition area
floor area

= 15m x 3m = 45m2
= 20m x 5m
= 45m2 / 100m2 = 0.45

The walls span a shorter distance

can be lightweight
consequent benefits on the weight of the structure and
extent of footings required.
The most efficient wall to floor ratio does not necessarily
means it is the optimum solution in term of cost. It merely
gives an indication of the most effective geometric shape.

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JK Ho

5.0

wall area
floor area

5.0

Plan A:

10.0

The Wall/Floor Area Ratios (measured on the inside face) are:

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Other design factors that can have an effect on overall cost include
the following:

Mechanisation
speed up production, especially through the use of
prefabricated building components which eliminate much
of the cutting on site.

Prefabrication
allows maximum efficiency and economy as a result of
mass production.

Standardisation
allows manufacturers to use the same machinery
configuration for longer periods and therefore obtain
economies of scale in production
also allows the use of interchangeable parts resulting in
more competitive pricing.

Buildability
an approach where design takes account of the
construction process.

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Tutorial 4
1. List five (5) design factors that will influence the cost of the
building.
2. Briefly describe with illustrations, how the shape of a building
influences the cost of the building.

END

3. Explain why increases in the size of a building can result in a

reduction of cost per square metre of the floor area.
4. Circulation space such as entrance halls, lobbies, passage
ways, corridors, stairwells and lift wells are considered as
dead space. Explain
5. Briefly explain the term planning efficiency factor in
relation to gross floor area and circulation area.

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6. Calculate and compare the planning efficiency factor for the

following building layouts.

7. What are the factors that affect the cost of high rise buildings
compared to low rise?
8. Explain the following ratios used to compare cost of
buildings:
a) Wall/Floor
b) Window/Wall
c) Partition/Floor

15m

17m

30m

40m

40m

60m

15m
7m

25m
2m width circulation

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