How to Budget for Building a Warehouse

3 May 2023                 By Aaron Barker, Head of Sales

IN BRIEF:


  • An average warehouse costs around $3,000 to $3,500 per square metre for a complete turnkey installation.

  • For a structural kit installation only, the cost drops significantly to around $500 – $700 per m2.

  • The structure itself is just part of your budget: you’ll also need to allow for things like civil works, fencing, soil reports, insurance, office fitout and more.

  • You can save money by getting an efficient structural design right off the bat, rather than settling for an inefficient design that has to be re-engineered and streamlined. Structural design is one of our strengths, so contact us early to ensure you get the right design from the beginning.

CONTENTS

Average Warehouse Costs and How to Budget for Them

Balancing Costs and Outcomes in Your Commercial Building Project

With any construction project, accurately forecasting the costs involved – and then staying approximately within your budget – is a strong indicator of success.

Getting a first-class structure with the finest possible finishes isn’t the best result if it means you have taken on debt you weren’t prepared for, or that you have to compromise on other business growth plans while you recover from the capital investment.

And if you overcapitalise, you may never see a return on investment if you sell the property.

Likewise, cutting corners at every turn and ending up with a warehouse that is too small or not set up properly for your business isn’t a success either. You might have stayed within budget but your day-to-day operations are now hampered by unnecessary cost-cutting, stifling business growth.

How to Allocate Funds Efficiently

The best path forward when looking at building a commercial warehouse is to spend ample time in the research, budgeting and design stages. Design, planning and permits are the lengthiest stages of the build, and accurate costings can’t be done until the design is complete.

Embarking on your project with strong knowledge of the costs involved will set you up for success, so if you want to build in a year’s time it’s important to start the process now.

“Far too often we see people spending excessive amounts on inefficient structural designs, which then have to be re-engineered and streamlined, adding more time and money to the project. Structural design is one of our strengths, so contact us early to ensure you get an efficient design from the beginning,” says Aaron.

Factors that Impact Warehouse Costs

Building a warehouse is not a simple undertaking: a large, complex project requires a thorough understanding of the costs involved. The last thing you need as a business leader is to have to manage unforeseen costs once you’re already committed to your building project, so understanding the numbers is key.


Additionally, knowing which costs may fluctuate more than others will mean there is less chance of unwanted surprises.


The cost of steel, for example, is one area where market forces and the global market influence the cost, and this can vary from month to month. Transport costs are also at the mercy of fuel prices (which we all know can oscillate by the day).


The best way to manage variable costs is to ensure you leave some breathing room in your budget, and always seek financial advice to ensure you’re taking on a manageable level of debt.

Budget for Building a Warehouse in Australia

Below are some suggested items to include in your commercial warehouse budget. Each of these can vary enormously depending on your site, council regulations, and the size and application of the building itself (for example, engineering the structure to support a gantry crane).


This is definitely not an exhaustive list, but it should provide some structure to help you lay out the costs for your project.


1. Design and Certification


  • Fire design
  • Structural design
  • Civil design
  • Soil reports
  • Section J (or energy reports)
  • Council approvals


2. Civil Works


  • Hardstand construction
  • Drainage considerations
  • Driveways and paving
  • Signage, bollards, wheel stops, line marking
  • Landscaping and curbing (noting that this may be stipulated by your council)
  • Perimeter fencing
  • Crossovers (connecting your driveway from the boundary line to the street)


3. Building Works


  • Structural kit and installation costs
  • Foundations and slab
  • Office and internal fit-out costs (carpeting, lighting, furniture etc)


4. Services and Connections (Water, Gas, Power, Data)


5. Fire Services


6. Land Cost


7. Other Potential Associated Costs


  • Insurance
  • Loan costs and fees for professional advice
  • Moving costs if you are shifting your operation into a new location
  • Tax obligations (stamp duty, CGT)
  • Commissioning of equipment (such as HVAC services)

Get Personalised Advice from Steelcorp

At the beginning of this article, we stated that the cost per m2 to build a warehouse is around $3,000 – $3,500 for a full turnkey build. This of course is a ballpark figure and can vary considerably depending on how much pavement area needs to be laid, the structure of the building, cladding choices, features like awnings, and a range of other factors.


We also offered an estimate of a structural kit of $500 – $700 per m2 (installed). Steelcorp’s kits are custom designed for every project, so this figure is a guide only.


If you’re on a tight budget, we have written a guide on reducing the price of your shed, but ultimately we aim to help you get the best value structure that is fit for purpose and returns positive ROI for your business.

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