How to reduce construction costs without sacrificing quality

Cost pressure on capital projects doesn't stay contained. On a single headquarters project, small inefficiencies can cascade into major overruns. If you're managing multiple builds simultaneously (labs, headquarters, multi-site programs) unmanaged costs compound across all of them. Bringing in a strategic cost and project management partner before design locks is often what separates projects that hit their targets from those requiring six-figure corrections later.

This guide shows what “value engineering” looks like in practice, and what this approach has delivered for organizations managing the same complexity you are.

Real-world example: The $200,000 mistake

A facilities director at a growing tech company thought he had budget management figured out. With the CEO demanding tight cost controls for a 50,000-square-foot office renovation, he found the lowest bidder, chose basic finishes and cut corners across the board.

Initial result: 15% under budget. Success? Not quite.

Six months later, the problems started: 

Month 0: Project complete, 15% under budget ✓

Month 6: Problems emerge

• Cheap flooring shows wear in high-traffic areas
• Lighting causes employee headaches, hurts productivity
• Undersized HVAC can't handle actual load
  • Temperatures swing wildly
  • Energy bills skyrocket

Month 18: Back to CEO requesting $200,000 to fix "savings"

Why these mistakes cost even more today:

MEP (mechanical, electrical and plumbing) services now represent 29% of total construction costs and saw price increases of up to 10% year-over-year

That means undersized or poorly specified systems become exponentially more expensive to correct.

Value engineering, also known as value management, is a proactive mindset aimed at achieving the best possible value with capital investments.

Unlike simple cost-cutting, which indiscriminately replaces materials with cheaper options to reduce the bottom line, value engineering aims to maximize the value of an investment to strengthen the bottom line for the long run by reducing costs without sacrificing quality.

Whether you're expanding office space or introducing a new facility to expand production, a value-first philosophy applies cost efficiency to every phase. It requires deep understanding of what's driving project costs, how to source alternatives and the long-term impact of design and construction decisions.

"When we approach a capital project, we don't just ask, 'How much will it cost?'" says Daniel Malacchini, Head of APAC Cost Advisory, JLL Project and Development Services. "We ask, 'What's the best way to achieve our goals with the resources we have?'" 

The math behind that table is simple: your ability to influence a project’s outcome is highest at the very start — and drops fast as design and construction progress. The cost of making a change runs in the opposite direction. That crossover is exactly why an occupier brings a cost and PM strategy to the table on day one, not after the budget is set.

For a lab buildout or a multi-site consolidation — where dozens of stakeholder groups and system specs are locked in early — this window closes even faster than it does for a standard office fit-out.

1. Assemble the right team from day one

Core roles:

• Executive sponsor from senior leadership

• Project owner (business unit lead)

• Corporate real estate lead

• Finance officer

• Cost manager (most critical)

• Project manager

• Facilities operations

Your cost manager should be involved before you talk to a designer or create the project brief. They know where money gets spent and wasted, understand current market drivers (steel costs, labor shortages, supply chain issues), and identify cost-saving opportunities before commitments are made.

2. Maximize impact in the early concept stage

"About two-thirds of your best money-saving opportunities happen in the very beginning, before you've locked into your plan. Once you're halfway through design, your options get limited fast. The biggest savings come when everything is still on the table and you can be creative about how to solve problems." 
— Gary Tracey, Head of EMEA Cost Management, JLL

Example: A project specified imported Italian tile. With high shipping costs and European summer holidays causing delays, the team found South American tile that looked identical, saved time and reduced costs without compromising design intent.

3. Prioritize project design elements

Create a ranking system based on what matters most to your business. When choosing between expensive collaborative spaces versus individual focus rooms, your framework helps you pick the one that delivers the most value for your specific goals.

Office headquarters priorities:

• Talent attraction and retention

• Productivity enhancement

• Collaboration effectiveness

• Innovation support

• Culture reinforcement

• Adaptability to change

• Employee health and wellbeing

   

Industrial and logistics priorities:

• Operational safety and efficiency

• Scalability and future capacity

• Equipment compatibility

• Supply chain optimization

• Sustainability commitments

• Regulatory compliance

1. Challenge scope and align to operational needs

Begin every project by questioning whether proposed features genuinely support your goals. And always ground decisions in operational requirements versus aesthetics.

2. Source materials strategically

Prioritize standard materials that cost less, arrive faster, and simplify future replacement, while researching global suppliers to compare quality and value.

3. Design for efficiency and adaptability

Keep workspace layouts simple with regular grids that reduce construction costs and improve future flexibility, and size building systems correctly rather than overbuilding "just in case." Properly scaled HVAC and electrical equipment costs less upfront and operates more efficiently.

4. Execute with discipline

Order materials with long delivery times early and run project phases in parallel where possible, using careful sequencing. Monitor costs at every project stage rather than setting estimates once. Track construction costs and project progress throughout to ensure operational requirements are met and budgets are protected as market prices shift.

PepsiCo Regional HQ, Riyadh

Challenge: 2,800 sqm headquarters to support growth while honoring 70 years of heritage

Solution: Streamlined approvals and optimized procurement processes enabled faster delivery while integrating sustainable features like intelligent lighting controls.

Results:

• 20% faster completion than expected
• 15-20% cost savings against projections
• Space built for collaboration, focus and wellbeing

Life Sciences Lab Expansion

Challenge: 30,000 sqft expansion supporting bio production, pharmaceutical analytics and genetic science divisions with different specifications

Solution: Design-Build delivery method allowed construction to start while final details were refined

Results:

• $390,000 in cost savings on $15M program
• 600+ specialized instruments deployed across multiple divisions

Telecommunications Campus Consolidation

Challenge: Consolidate nine Bay Area sites into one 227,220 sqft campus during two acquisitions, multiple divestitures and extreme weather delays

Solution: Daily site photography, rotating project teams, continuous reprogramming to accommodate 24/7 lab operations

Result: Complex technology campus delivered on-time to support critical R&D and testing requirements

Does your project need value engineering?

• Project budget over $5 million? 
• Executive or board attention? 
• Fixed deadline (lease expiration, regulatory milestone)? 
• Operations remain on-site during construction? 
• Requires specialist knowledge (cleanrooms, trading floors, data centers)? 
• Spans multiple locations? 
• Failure would affect operations, compliance or asset value?

3+ YES answers: Engage value engineering expertise before site selection.

Real value from your project starts before you break ground. It begins with being crystal clear about what you're trying to achieve and why.

Are you trying to attract top talent? Boost productivity? Support collaboration? Improve safety? Expand capacity? Honor heritage while enabling growth? Your answers shape every decision that follows.

Real value lives in the details: from the type of glass on office doors to finding the best supplier, even if they're halfway around the world. It means having people on your team who can see how changing one thing affects everything else.

"You have to shift your thinking," says Tracey. "Stop obsessing over just the price tag and start looking at the whole picture of what you're getting for your investment."

When you approach value engineering thoughtfully from day one, with the right expertise guiding you, it saves money and makes your project work better for your business.

Already working with JLL on another service line? Ask your JLL team to run this framework against your next capital project or connect directly with our Project and Program Management team to see where early-stage value engineering could change the numbers on what you’re planning next.