Member Article

Maximising Value From a Cat A Fit-Out

By Howard Barnes, Managing Director of 360Degrees

In the old days, when it came to commercial property, a building was a building. Provided it had room for offices and desks, plus all necessary electrical and plumbing requirements, a fresh lick of paint was good enough.

This is no longer the case. Today, landlords and investors must be attuned to a much more competitive marketplace where the office user has much greater sway. Even before a deal is signed, users are much more discerning about what they expect – and, increasingly, demand – from a workspace environment.

That means that the Category A fit-out – anything that is dealt with by the developer – is a ‘make or break’ area when it comes to getting the highest possible yield. A high quality fit-out is no longer the responsibility of those using the building; the onus falls on landlords and investors to create versatile, inspiring workspaces from the start.

Done well, this means a great opportunity to add value to a property. With astute planning, the extra investment itself needn’t cost you extravagant amounts, but it pays off in distinctive, desirable workspaces that you can charge a premium for.

Creating Style and Functionality

The first issue to realise is how and why trends are changing. The traditional, any-colour-as-long-as-it-is-beige approach won’t cut it. Users are looking to take pride in the building they have adopted, and the appearance of both outside and inside spaces matter. A building has to have style and functionality, to be an integral part of the business(es) that use it, even down to the branding for the building itself.

Any communal parts of the building – such as lobbies, corridors or beak-out spaces – must reflect the same attention to detail and quality that the user aspires to in their dedicated facilities. Leave nothing for granted; we’ve found in recent years that tenants are even paying more attention to the quality of teapoint or washroom facilities.

Assessing Needs

Achieving these changes needn’t be expensive, provided you do your homework first to minimise outlay. It’s best to assess the needs of the local economy – which types of company are most likely to want your building? For example, the rise of Internet-based storage – the Cloud – in theory leads to a paper-less office, but certain professional services still require extensive hard-copy filing.

Crucially, what needs do these businesses have which are not being serviced by the present commercial property stock? The rising popularity of flexible office methods such as agile working or hot desking need to be taken into consideration, as these will impact on the placement and quantity of electrical points or the size of Internet connection required. Is there scope to implement fibre-optic broadband into the fit-out to improve rentability?

Asking these questions – and determining the right answers – is vital from the start. Changes to a fit-out while the project is already in progress can be costly to the landlord or investor.

Adding Value

The challenge is to find that balance between highlighting the individuality of a building and the need to create a systemised approach to the fit-out that can be done quickly and cost-effectively.

In order to do this, there are two key questions to ask – what are the truly essential features that demand investment? On the other hand, where can savings be made?

Items in the former category are likely to include lighting and air conditioning. Don’t skimp on either, because they will shape a user’s perceptions of a potential office space in significant ways. Favour natural light where possible but, where this is limited, aim for both quality and quantity in your choice of artificial lighting. Likewise, choosing the right temperature control systems will depend on how a space will be used – for example, how will it be subdivided?

Little things matter, too. Take the finish on a floor – it it’s shabby, it can neuter the positive impressions made elsewhere, so it’s worth that bit extra to select better quality materials.

Saving Money

The good news is that, while you’re spending on other aspects, potential savings are everywhere. Look up – do you really need to install ceilings? The modern trend is towards minimalism; leaving a more skeletal building might create a more interesting space, especially now that you’ve dealt with the air conditioning.

Retain or re-use as much as you can. If you’re giving your washrooms a makeover, can the existing fittings be kept? Similarly, do you need to change every door? While certain door types – such as fire doors – are subject to ever-more-stringent legal standards, in some instances the creative application of paint or graphics can make an existing door look brand new.

Ultimately, a Category A fit-out will still cost somewhere between £200 and £500 /m². Some of that cost will inevitably depend on factors outside your control – the building’s location, the scope of work required, and so on. As for the rest, that’s up to you. By thinking clearly, being creative and having the ambition to create a better commercial property, you can really maximise value.

To find out more, visit www.360degrees.uk.com

This was posted in Bdaily's Members' News section by ThreeHundred&SixtyDegrees .